“Bureaucratic Competence and Procurement Outcomes“
with F. Decarolis, E. Iossa, V. Mollisi, G. Spagnolo
Accepted for publication at The Journal of Law, Economics, and Organization
To what extent does a more competent public bureaucracy contribute to better economic outcomes? We address this question in the context of the US federal procurement of services and works, by combining contract-level data on procurement performance and bureau-level data on competence and workforce characteristics. We use the death occurrences of specific types of employees as instruments and find that an increase in bureau competence causes a significant and economically important reduction in: i) time delays, ii) cost overruns, and iii) number of renegotiations. Cooperation within the office appears to be a key driver of the findings.
Keywords: Buyer quality, competence, procurement, public management, state capacity. JEL Classification: D44; H11, H57.
“Can the Private Sector Ensure the Public Interest? Evidence from Federal Procurement”
with G. Rovigatti
R&R, Management Science
We empirically investigate the effect of oversight on contract outcomes in public procurement. In particular, we stress a distinction between public and private oversight: the former is a set of bureaucratic checks enacted by contracting offices, while the latter is carried out by private insurance companies whose money is at stake through the so-called performance bonding. By focusing on the U.S. federal service contracts in the period 2005-2015, we exploit an exogenous variation in the threshold for the application of both sources of oversight in order to separately estimate their causal effects on execution costs and time. We find that: (i) private oversight has a positive effect on outcomes through the screening of bidders that alters the pool of winning firms; (ii) public oversight negatively affects outcomes, due to excessive red tape imposed by low-competence buyers.
Keywords: Oversight, Procurement, Screening, Red tape, Moral hazard. JEL Classification: D21, D44, D82; H57; L74
“Buyer’s Role in Innovation Procurement“
with F. Decarolis, G. de Rassenfosse, E. Iossa, V. Mollisi, E. Raiteri, G. Spagnolo
R&R, Strategic Management Journal
What is the impact of buyers on the performance of innovation procurement? In which phase of the procurement process are buyers most crucial and why? We address these questions by exploiting a novel dataset that links U.S. federal R&D contracts to their follow-on patents, citations and claims. Using the deaths of managers in the offices close to where contracts are performed as shocks to the functioning of these offices, we measure a positive and sizable effect of public buyers on all three outcome measures. The buyer’s role is stronger in the pre-award, tender-design phase, where cooperation between different specialists is essential, than in the following contract-management phase typically performed by individual officers. Consistently, bureaus where employees perceive high level of cooperation within the office are associated with better R&D outcomes.
Keywords: Buyers, Innovation, Management Practices, Procurement, Patents, R&D Procurement. JEL Classification: H11, H57; O31, O32, O38.
“Competition, patents, and workload”
(with Raiteri, E.)
(with Rovigatti, G.)
- “SMALL BUSINESS SET ASIDE AND PROCUREMENT OUTCOMES”
(with Cappelletti, M., Coviello, D., and Spagnolo, G.)
- “WHY DO FIRMS (NOT) BID ON GOVERNMENT TENDERS?”
(with Blesse, S. and Bohne, A.)