Do local governments do it better? Analysis of time performance in the execution of public works

Decentralization and Public Procurement Performance: New Evidence from Italy

“…Bandiera et al (2009), considering purchases of standardized goods by different classes of Italian public purchasers, find, differently from Guccio et al (2014) and our results, that the least efficient class is central government, while the average municipality is the second most efficient class after semi-autonomous bodies (e.g., local health authorities and universities). D' Alpaos et al (2013) in a study about the opportunistic use of time overruns in public works, also find that municipalities, although awarding the largest number of contracts, show higher cost-overruns than the average of the dataset; Decarolis (2014), also shows that municipalities are typically associated with higher cost-overruns (with respect to provinces); Guccio et al (2012) in a study about determinants of cost-overruns in public works, find, like Bandiera et al (2009), that all institutional levels of purchasers tend to have lower adaptation costs than the central government, while the evidence about local governments is not significant 6 .…”

“…14 Similar to that adopted in Guccio et al (2014), our new categorization of contracting authorities for Italy is a meaningful and not cumbersome one according to the discussion in Section 2. It consists of the following categories: central government, region, province, municipality, public institution, to be divided in semi-autonomous institution and other institution, public enterprise, utility, and private.…”

“…The main implication is that all public purchasers in Italy procure largely according to the same rules. Hence, the differences in performance are not attributable to differences in the rules, but rather to specific characteristics of different categories of public purchasers (see Guccio et al (2014)). …”

“…While this literature is very broad (see Dimitri et al (2006b) for a review), previous works focusing on the relationship between the degree of centralization and procurement performance are limited, with mixed empirical evidence. The paper closest to ours is Guccio et al (2014), who assess the time performance in the execution of public works by different levels of governments in Italy. Similarly to us, they find that local governments (and municipalities in particular) are less efficient (i.e., incur higher time-overruns) than the central government in the procurement of public works.…”

“…5 Guccio et al (2014), as virtually all recent empirical studies on procurement for Italy (see e.g., Bucciol et al (2013), Coviello and Mariniello (2014), Decarolis and Giorgiantonio (2015), Moretti and Valbonesi (2015), Branzoli and Decarolis (2015), Coviello and Gagliarducci (2017) and ), focus on public works contracts and cover the 2000-2005 period.…”