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The effect of discretion on procurement performance

Coviello, Decio, Guglielmo, Andrea and Spagnolo, Giancarlo (2016) The effect of discretion on procurement performance. CEP Discussion Paper (1427). Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Abstract

We run a regression discontinuity design analysis to document the causal effect of increasing buyers' discretion on procurement outcomes in a large database for public works in Italy. Works with a value above a given threshold have to be awarded through an open auction. Works below this threshold can be more easily awarded through a restricted auction, where the buyer has some discretion in terms of who (not) to invite to bid. Our main result is that discretion increases the probability that the same firm wins repeatedly, and it does not deteriorate (and may improve) the procurement outcomes we observe. The effects of discretion persist when we repeat the analysis controlling for the geographical location, corruption, social capital and judicial efficiency in the region of the public buyers running the auctions.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/
Additional Information: © 2016 The Authors
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 10 May 2016 10:35
Last Modified: 01 Sep 2019 23:26
Funders: Economic and Social Research Council, Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/66445

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