IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Court Efficiency and Procurement Performance

Listed author(s):
  • Decio Coviello

    (University of Montreal)

  • Luigi Moretti

    ()

    (University of Padova)

  • Giancarlo Spagnolo

    (University of Roma "Tor Vergata")

  • Paola Valbonesi

    ()

    (University of Padova)

Disputes on the penalties enforceable for breach of contract are often solved in court. Using a large dataset on Italian public procurement contracts, we study the effects of the inefficiency of the local law courts on the delay with which contractors deliver public works. First we sketch a simple model to see how inefficient law courts - i.e. those characterized by longer average duration of trials - may induce public buyers to refrain from enforcing penalties for late delivery in order to avoid costly disputes in court. Then our empirical findings show that, where the local law courts are inefficient: i) public works are delivered with longer delays, and this applies particularly to higher-value contracts - i.e. complex projects; ii) contracts are more often awarded to larger firms; and iii) on average, a higher share of final payment in contracts is adopted. These results are not driven by omitted environmental variables, since we show that delays in the completion of contracted works are still a selected by the efficiency of the local law courts after including province-related fixed effects in the model and considering other possible explanations for our findings.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://economia.unipd.it/sites/decon.unipd.it/files/20130164.pdf
Download Restriction: no

Paper provided by Dipartimento di Scienze Economiche "Marco Fanno" in its series "Marco Fanno" Working Papers with number 0164.

as
in new window

Length: 43 pages
Date of creation: Jun 2013
Handle: RePEc:pad:wpaper:0164
Contact details of provider: Postal:
via del Santo, 33 - 35122 Padova

Phone: +39 +49 8274210
Fax: +39 +49 827.4211
Web page: http://www.decon.unipd.it/

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window

  1. Decio Coviello & Andrea Guglielmo & Giancarlo Spagnolo, 2016. "The Effect of Discretion on Procurement Performance," CEP Discussion Papers dp1427, Centre for Economic Performance, LSE.
  2. Butler, Jeffrey V. & Carbone, Enrica & Conzo, Pierluigi & Spagnolo, Giancarlo, 2013. "Reputation and Entry," Konkurrensverket Working Paper Series in Law and Economics 2013:3, Konkurrensverket (Swedish Competition Authority).
  3. Gregory Lewis & Patrick Bajari, 2011. "Moral Hazard, Incentive Contracts and Risk: Evidence from Procurement," NBER Working Papers 17647, National Bureau of Economic Research, Inc.
  4. Chiara D’Alpaos & Michele Moretto & Paola Valbonesi & Sergio Vergalli, 2013. "Time overruns as opportunistic behavior in public procurement," Journal of Economics, Springer, vol. 110(1), pages 25-43, September.
  5. Simon Johnson & John McMillan & Christopher Woodruff, 2001. "Courts and Relational Contracts," NBER Working Papers 8572, National Bureau of Economic Research, Inc.
  6. Luigi Moretti & Paola Valbonesi, 2015. "Firms’ Qualifications and Subcontracting in Public Procurement: An Empirical Investigation," Journal of Law, Economics and Organization, Oxford University Press, vol. 31(3), pages 568-598.
  7. Iossa, Elisabetta & Spagnolo, Giancarlo, 2011. "Contracts as Threats: on a Rationale For Rewarding A while Hoping For B," CEPR Discussion Papers 8195, C.E.P.R. Discussion Papers.
  8. Patrick Bajari & Robert McMillan & Steven Tadelis, "undated". "Auctions versus Negotiations in Procurement: An Empirical Analysis," Working Papers 02007, Stanford University, Department of Economics.
  9. Decarolis, Francesco & Palumbo, Giuliana, 2015. "Renegotiation of public contracts: An empirical analysis," Economics Letters, Elsevier, vol. 132(C), pages 77-81.
  10. Patrick Bajari & Gregory Lewis, 2009. "Procurement Contracting with Time Incentives: Theory and Evidence," NBER Working Papers 14855, National Bureau of Economic Research, Inc.
  11. Decio Coviello & Mario Mariniello, 2008. "Does Publicity Affect Competition? Evidence from Discontinuities in Public Procurement Auctions," CSEF Working Papers 189, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  12. Katherine Doornik, 2010. "Incentive Contracts with Enforcement Costs," Journal of Law, Economics and Organization, Oxford University Press, vol. 26(1), pages 115-143, April.
  13. Matthieu Chemin, 2012. "Does Court Speed Shape Economic Activity? Evidence from a Court Reform in India," Journal of Law, Economics and Organization, Oxford University Press, vol. 28(3), pages 460-485, August.
  14. Stephan Litschig & Yves Zamboni, 2008. "Judicial presence and rent extraction," Economics Working Papers 1143, Department of Economics and Business, Universitat Pompeu Fabra, revised Dec 2012.
  15. Cooter, Robert D & Rubinfeld, Daniel L, 1989. "Economic Analysis of Legal Disputes and Their Resolution," Journal of Economic Literature, American Economic Association, vol. 27(3), pages 1067-1097, September.
  16. Bucciol, Alessandro & Chillemi, Ottorino & Palazzi, Giacomo, 2013. "Cost overrun and auction format in small size public works," European Journal of Political Economy, Elsevier, vol. 30(C), pages 35-42.
  17. Giuliana Palumbo & Giulia Giupponi & Luca Nunziata & Juan S. Mora-Sanguinetti, 2013. "Judicial Performance and its Determinants: A Cross-Country Perspective," OECD Economic Policy Papers 5, OECD Publishing.
  18. Coviello, Decio & Gagliarducci, Stefano, 2010. "Building Political Collusion: Evidence from Procurement Auctions," IZA Discussion Papers 4939, Institute for the Study of Labor (IZA).
  19. Veronica Grembi & Tommaso Nannicini & Ugo Troiano, 2012. "Policy Responses to Fiscal Restraints: A Difference-in-Discontinuities Design," CESifo Working Paper Series 3999, CESifo Group Munich.
  20. Rosenberg, D. & Shavell, S., 1985. "A model in which suits are brought for their nuisance value," International Review of Law and Economics, Elsevier, vol. 5(1), pages 3-13, June.
  21. Jacopo Ponticelli & Leonardo S. Alencar, 2016. "Court Enforcement, Bank Loans, and Firm Investment: Evidence from a Bankruptcy Reform in Brazil," The Quarterly Journal of Economics, Oxford University Press, vol. 131(3), pages 1365-1413.
  22. H. Fraisse & F. Kramarz & C. Prost, 2014. "Labor Disputes and Job Flows," Documents de Travail de la DESE - Working Papers of the DESE g2014-13, Institut National de la Statistique et des Etudes Economiques, DESE.
  23. Laeven, Luc & Woodruff, Christopher, 2004. "The quality of the legal system, firm ownership, andfirm size," Policy Research Working Paper Series 3246, The World Bank.
  24. Francesco Decarolis, 2014. "Awarding Price, Contract Performance, and Bids Screening: Evidence from Procurement Auctions," American Economic Journal: Applied Economics, American Economic Association, vol. 6(1), pages 108-132, January.
  25. Miriam A. Golden & Lucio Picci, 2005. "Proposal For A New Measure Of Corruption, Illustrated With Italian Data," Economics and Politics, Wiley Blackwell, vol. 17, pages 37-75, 03.
  26. Moretti, Luigi, 2014. "Local financial development, socio-institutional environment, and firm productivity: Evidence from Italy," European Journal of Political Economy, Elsevier, vol. 35(C), pages 38-51.
  27. Bajari, Patrick & Tadelis, Steven, 2001. "Incentives versus Transaction Costs: A Theory of Procurement Contracts," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 387-407, Autumn.
  28. Decio Coviello & Andrea Ichino & Nicola Persico, 2015. "The Inefficiency Of Worker Time Use," Journal of the European Economic Association, European Economic Association, vol. 13(5), pages 906-947, October.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pad:wpaper:0164. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Raffaele Dei Campielisi)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.