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If You Give Bureaucrats an Inch, Will They Take a Yard? Lessons from Threshold Regulatory Reform in Italy

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  • Massimo Finocchiaro Castro
  • Calogero Guccio
  • Domenica Romeo

Abstract

The role of discretion in public procurement has been the subject of wide debate in regulation literature and practice. Greater discretion potentially may allow for greater efficiency in procurement. However, when social capital and institutional quality are low, more discretion can easily open the door to bribery and corruption. In this paper, adopting a semiparametric approach and using a large dataset of public works managed by Italian municipalities, we empirically assess the effects of a reform in the regulation of public works in Italy, approved in 2011, that has increased the discretion of bureaucrats in the choice of the firms. The results provide evidence that the reform has exerted a positive, although mild, effect on the performance of public works execution. However, the positive role of the reform is more relevant in those areas where the effect of public service norms and prosocial behaviors are higher.

Suggested Citation

  • Massimo Finocchiaro Castro & Calogero Guccio & Domenica Romeo, 2024. "If You Give Bureaucrats an Inch, Will They Take a Yard? Lessons from Threshold Regulatory Reform in Italy," Public Finance Review, , vol. 52(6), pages 727-764, November.
    • Handle: RePEc:sae:pubfin:v:52:y:2024:i:6:p:727-764
    DOI: 10.1177/10911421221138438
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    References listed on IDEAS

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    1. Massimo Finocchiaro Castro & Calogero Guccio & Ilde Rizzo, 2014. "An assessment of the waste effects of corruption on infrastructure provision," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(4), pages 813-843, August.
    2. Marina Cavalieri & Calogero Guccio & Domenico Lisi & Ilde Rizzo, 2020. "Does Institutional Quality Matter for Infrastructure Provision? A Non-parametric Analysis for Italian Municipalities," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(3), pages 521-562, November.
    3. Baldi, Simona & Bottasso, Anna & Conti, Maurizio & Piccardo, Chiara, 2016. "To bid or not to bid: That is the question: Public procurement, project complexity and corruption," European Journal of Political Economy, Elsevier, vol. 43(C), pages 89-106.
    4. Rodrigo Carril, 2021. "Rules Versus Discretion in Public Procurement," Working Papers 1232, Barcelona School of Economics.
    5. Calogero Guccio & Giacomo Pignataro & Ilde Rizzo, 2012. "Measuring the efficient management of public works contracts: A non-parametric approach," Journal of Public Procurement, Emerald Group Publishing Limited, vol. 12(4), pages 528-546, March.
    6. Calogero Guccio & Giacomo Pignataro & Ilde Rizzo, 2014. "Evaluating the efficiency of public procurement contracts for cultural heritage conservation works in Italy," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 38(1), pages 43-70, February.
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