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Discretion and supplier selection in public procurement

Audinga Baltrunaite (), Cristina Giorgiantonio (), Sauro Mocetti () and Tommaso Orlando

No 1178, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: Public procurement outcomes depend on the ability of the procuring agency to select high-performing suppliers. Should public administrations be granted more or less discretion in their decision making? Using Italian data on municipal public works tendered in the period 2009-2013, we study how a reform extending the scope of bureaucrat discretion affects supplier selection. We find that the share of contracts awarded to firms having a local politician among its administrators or shareholders increases, while the (ex-ante) labor productivity of the winning firms decreases, thus suggesting a potential misallocation of public funds. These effects are concentrated among lower quality procurement agencies.

Keywords: discretion; supplier selection; public procurement; transparency; corruption (search for similar items in EconPapers)
JEL-codes: D72 D73 H57 P16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta, nep-eur and nep-reg
Date: 2018-06
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Citations: View citations in EconPapers (2) Track citations by RSS feed

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Related works:
Working Paper: Discration and Supplier Selection in Public Procurement (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_1178_18

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