Mayor’s wage and Public procurement

Angelo D'Andrea

No 19125, BAFFI CAREFIN Working Papers from BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy

Abstract: In this paper I run a regression discontinuity design analysis to document the causal effect of mayor’s wage on procurement outcomes in a large data base of public procurement contracts in Italy.To identify the wage effect, I use peculiarities of the Italian legislation where mayor’s remuneration varies at pre-determined population thresholds. My main results are as follows. First, a higher wage (i.e., my treatment) is not related with differences in aggregate measures of procurement: number of tenders, total procurement expenditure and the mean value of the contract in the municipality. Second, some of the ex-ante procurement outcomes are positively affected by mayor’s wage: the number of admitted offers and final rebates on the reserve price. Finally, a higher wage causes a significant decrease in the probability that the same firm is awarded a contract repeatedly. This paper is the first to document a direct relationship between mayor’s salary and public procurement.

Keywords: Public procurement; Local governments; Public wages (search for similar items in EconPapers)
JEL-codes: H0 H5 H57 H7 H76 (search for similar items in EconPapers)
Pages: 42
Date: 2019
New Economics Papers: this item is included in nep-eur
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