Does Institutional Quality Matter for Infrastructure Provision? A Non-parametric Analysis for Italian Municipalities

This study explores the relationship between different dimensions of regional institutional quality and the efficient provision of transport infrastructure. A two-stage semi-parametric approach is applied to a large sample of public works procured by about 1700 Italian municipalities in the 2000–2014 period. First, we estimate the performance in contract execution; then, we test the impact of different measures and dimensions of institutional quality at both regional and provincial level. The results provide evidence that the quality of institutional environment matters in infrastructure procurement, though some specific dimensions of institutional quality appear to be more relevant than others in affecting performance in contract execution. Overall, the estimates are robust to alternative measures of institutional quality, alternative model specifications, and different sample selections.