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Local government responses to procurement centralization: Evidence from Italy

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  • Castellani, Lorenzo
  • Decarolis, Francesco
  • Rovigatti, Gabriele

Abstract

This paper analyzes how local public authorities in Italy responded to recent procurement centralization reforms. Using detailed data on all Italian public contracts awarded between 2015 and 2017, we document three types of strategic behavior aimed at retaining local autonomy. First, authorities anticipating the reforms accelerated purchases to avoid central oversight. Second, they manipulated contract values to remain below monetary thresholds. Third, when required to centralize, they often chose the least centralized forms of coordination. These findings highlight how institutional design and local incentives can blunt the intended effects of centralization policies, offering broader lessons for procurement reform across the EU.

Suggested Citation

  • Castellani, Lorenzo & Decarolis, Francesco & Rovigatti, Gabriele, 2025. "Local government responses to procurement centralization: Evidence from Italy," The Quarterly Review of Economics and Finance, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:quaeco:v:103:y:2025:i:c:s1062976925000535
    DOI: 10.1016/j.qref.2025.102012
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    JEL classification:

    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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