The effect of administrative capacity in public procurement on project completion times

In this study, we use a large dataset documenting public works in Italy to examine how administrative capacity can shape the outcomes of procurement procedures. The analysis considers the duration of the three main phases - design, awarding, and execution. First, it shows substantial heterogeneity across contracting authorities in the length of these phases for projects that are similar in terms of observable characteristics. These differences in durations are strongly correlated with indicators of administrative quality. Second, the identity of the project manager (RUP) is also shown to play an important role. Observable characteristics - such as the RUP's level of education or experience - explain only a limited share of the variation, highlighting the importance of unobservable factors such as tacit knowledge, effort and managerial skills. Third, in the execution phase, both contracting authorities and firms play a crucial role: completion times are shorter when works are awarded to more productive firms, and more capable project managers tend to select such firms more frequently.