Decentralization and public works procurement in Italy

This paper focuses on the relationship between efficiency of infrastructure provision and the institutional characteristics of procurers. We study this relationship for the Italian public work procurement system characterized by a very large number of procurers mainly of small size. The efficiency is assessed as the capacity to execute the public work within the time and costs agreed in the contract. The empirical analysis is based on data drawn from a large sample of Italian public works for roads and highways and it is carried out with nonparametric frontier approaches. The determinants of efficiency are also investigated to assess whether the institutional characteristics of the contracting authority affect the efficient execution of the contracts. Our estimates show that local governments appear to be systematically less efficient in managing the execution process and, moreover, efficiency is decreasing in their size.