Working Paper: CEPR ID: DP12567
Authors: Francesco Decarolis; Lorenzo Castellani; Gabriele Rovigatti
Abstract: This paper analyzes the process of centralization of public procurement in Europe,with an emphasis on the Italian case. It illustrates the main normative and regulatoryreforms that took place between 2000 and 2016 at both EU and Italian levels. It thenempirically evaluates the potential distortions induced by the most recent wave of centralizationreforms. Using procurement data on all Italian public contracts awardedbetween 2015 and 2017, it finds that administrations expecting to lose their ability tocontract independently game the centralization requirements in three ways. In the shortrun, they anticipate their purchases to avoid delegating to a central body. In the longerrun, they both manipulate contract values, breaking down purchases into smaller lotsof amounts below the thresholds driving centralization requirements, and, when giventhe option, aggregate into the smallest types of centralized purchasing bodies. Thesethree distortions partially offset the potential benefits of the centralization reforms.
Keywords: Centralization; Procurement; Public Contracts
JEL Codes: K23; L22; L74; D44; H57
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Centralization reforms (H77) | Contracts awarded by decentralized authorities (D86) |
| Centralization reforms (H77) | Contracts procured by central purchasing bodies (CPBs) (H57) |
| Anticipatory purchasing behavior (D84) | Contracts awarded just before the reform's enactment dates (H57) |
| Manipulation of contract values (D86) | Splitting contracts into smaller amounts below thresholds (D86) |