Indirect Savings from Public Procurement Centralization

Clarissa Lotti, Arieda Muco (), Giancarlo Spagnolo and Tommaso Valletti

American Economic Journal: Economic Policy, 2024, vol. 16, issue 3, 347-66

Abstract: Centralization of public procurement can lower prices for the government's direct purchase of goods and services. This paper focuses on indirect savings. Public administrations that do not procure directly through a central procurement agency might benefit from the availability of centrally procured goods. We exploit the introduction of a central purchasing agency in Italy and find that prices came down by 22 percent among administrations that bought autonomously. These indirect effects appear to be driven by informational externalities, especially for less competent public buyers purchasing technologically more complex goods. Accounting for indirect savings increases the estimate of direct ones.

JEL-codes: D83 H57 H83 (search for similar items in EconPapers)
Date: 2024
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Related works:
Working Paper: Indirect Savings from Public Procurement Centralization (2023)
Working Paper: Indirect Savings from Public Procurement Centralization (2023)
Working Paper: Indirect Savings from Public Procurement Centralization (2022)
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DOI: 10.1257/pol.20220357

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