Indirect Savings from Public Procurement Centralization

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

No 17019, CEPR Discussion Papers from Centre for Economic Policy Research

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% 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.

Keywords: Centralization; Informational externalities; Procurement; Public contracts (search for similar items in EconPapers)
JEL-codes: D44 H11 H57 H83 L38 L88 (search for similar items in EconPapers)
Date: 2022-02
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Related works:
Journal Article: Indirect Savings from Public Procurement Centralization (2024)
Working Paper: Indirect Savings from Public Procurement Centralization (2023)
Working Paper: Indirect Savings from Public Procurement Centralization (2023)
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