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Court Efficiency and Procurement Performance

Decio, Coviello,, Luigi Moretti, Giancarlo Spagnolo and Paola Valbonesi ()
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Decio, Coviello,: HEC Montréal - HEC Montréal

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: Disputes over penalties for breaching a contract are often resolved in court. A simple model illustrates how inefficient courts can sway public buyers from enforcing a penalty for late delivery in order to avoid litigation, therefore inducing sellers to delay contract delivery. By using a large dataset on Italian public procurement, we empirically study the effects of court inefficiency on public work performance. We find that where courts are inefficient: i) public works are delivered with longer delays; ii) delays increase for more valuable contracts; iii) contracts are more often awarded to larger suppliers; and iv) a higher share of the payment is postponed after delivery. Other interpretations receive less support from the data.

Keywords: Enforcement cost; Public procurement; Court efficiency (search for similar items in EconPapers)
Date: 2018
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01476673
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Published in Scandinavian Journal of Economics, Wiley, 2018, 120 (3), pp.826-858. ⟨10.1111/sjoe.12225⟩

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Journal Article: Court Efficiency and Procurement Performance (2018) Downloads
Working Paper: Court Efficiency and Procurement Performance (2018)
Working Paper: Court Efficiency and Procurement Performance (2016) Downloads
Working Paper: Court Efficiency and Procurement Performance (2013) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:hal-01476673

DOI: 10.1111/sjoe.12225

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