“One-size-fits-all” public works contract does it better? An assessment of infrastructure provision in Italy

Massimo Finocchiaro Castro, Calogero Guccio () and Ilde Rizzo

Journal of Policy Modeling, 2023, vol. 45, issue 5, 994-1014

Abstract: Public infrastructure procurement is a crucial policy tool, a prerequisite for public and private investments and for economic and social capital growth. Low performance in execution severely hinders infrastructure provision and benefits delivery. One of the most sensitive phases in public infrastructure procurement is the design because of the strategic relationship that it potentially creates between procurers and contractors in the execution stage, affecting the costs and the duration of the contract. In this paper, using recent developments in non-parametric frontiers and propensity score matching, we evaluate the performance in the execution of public works in Italy. The analysis provides robust evidence of significant improvement of performance where procurers opt for design and build contracts, which lead to lower transaction costs, allowing contractors to better accommodate the project in the execution. Our findings bear considerable policy implications.

Keywords: Infrastructure provision; Transaction costs economics; Public works procurement; Design and build contracts; Performance; Non-parametric frontiers; Propensity score matching (search for similar items in EconPapers)
JEL-codes: C14 D73 H57 O18 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:45:y:2023:i:5:p:994-1014

DOI: 10.1016/j.jpolmod.2023.07.003

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