The Effect of Discretion on Procurement Performance

Giancarlo Spagnolo, Decio Coviello and Andrea Guglielmo

No 11286, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We run a regression discontinuity design analysis to document the causal effect of increasing buyers' discretion on procurement outcomes in a large database for public works in Italy. Works with a value above a given threshold have to be awarded through an open auction. Works below this threshold can be more easily awarded through a restricted auction, where the buyer has some discretion in terms of who (not) to invite to bid. Our main result is that discretion increases the probability that the same firm wins repeatedly, and it does not deteriorate (and may improve) the procurement outcomes we observe. The effects of discretion persist when we repeat the analysis controlling for the geographical location, corruption, social capital and judicial efficiency in the region of the public buyers running the auctions.

Keywords: Procurement; Restricted auctions; Regression discontinuity; Regulatory discretion (search for similar items in EconPapers)
JEL-codes: C31 D02 D44 L11 (search for similar items in EconPapers)
Date: 2016-05
New Economics Papers: this item is included in nep-eur
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: The effect of discretion on procurement performance (2016)
Working Paper: The effect of discretion on procurement performance (2016)
Working Paper: The Effect of Discretion on Procurement Performance (2015)
Working Paper: The Effect of Discretion on Procurement Performance (2015)
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