Political competition and the use of discretionary procedures in public procurement: evidence from Italian data

Alessandro Cavalieri (University of Bologna)

Abstract

This paper empirically investigates the effect of political competition on the utilization of
discretionary award procedures in public procurement. It leverages data from Italian municipalities
in 2009-2016 and the entry of a new political party, the 5 Star Movement, through matching
estimators. The findings indicate that probity-based political opposition is linked to a reduced
likelihood, ranging from 4% to 7%, of opting for negotiated procedures over formal auctions.
The results align with two potential explanations: (i) bureaucratic defensive strategies and (ii)
diminished reliance on relational contracting or favoritism/corruption. However, the application
of repeated cross-section regressions using key indicators from the literature to capture political
competition does not reveal significant effects. Following the two possible interpretations, it
is argued that (a) the entry of an external actor disturbed an equilibrium built on ‘sharing
compromising information’; and/or (b) ’third-party opportunism’ limits well-intentioned public
administrators.

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