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“One-size-fits-all” public works contract does it better? An assessment of infrastructure provision in Italy

Author

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  • Finocchiaro Castro, Massimo
  • Guccio, Calogero
  • Rizzo, Ilde

Abstract

Public infrastructure procurement is a crucial policy tool, a prerequisite for public and private investments and for economic and social capital growth. Low performance in execution severely hinders infrastructure provision and benefits delivery. One of the most sensitive phases in public infrastructure procurement is the design because of the strategic relationship that it potentially creates between procurers and contractors in the execution stage, affecting the costs and the duration of the contract. In this paper, using recent developments in non-parametric frontiers and propensity score matching, we evaluate the performance in the execution of public works in Italy. The analysis provides robust evidence of significant improvement of performance where procurers opt for design and build contracts, which lead to lower transaction costs, allowing contractors to better accommodate the project in the execution. Our findings bear considerable policy implications.

Suggested Citation

  • Finocchiaro Castro, Massimo & Guccio, Calogero & Rizzo, Ilde, 2023. "“One-size-fits-all” public works contract does it better? An assessment of infrastructure provision in Italy," Journal of Policy Modeling, Elsevier, vol. 45(5), pages 994-1014.
    • Handle: RePEc:eee:jpolmo:v:45:y:2023:i:5:p:994-1014
    DOI: 10.1016/j.jpolmod.2023.07.003
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    More about this item

    Keywords

    Infrastructure provision; Transaction costs economics; Public works procurement; Design and build contracts; Performance; Non-parametric frontiers; Propensity score matching;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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