Can the private sector ensure the public interest? Evidence from federal procurement


Giuffrida, Leonardo M. ; Rovigatti, Gabriele


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URL: https://ub-madoc.bib.uni-mannheim.de/47324
URN: urn:nbn:de:bsz:180-madoc-473240
Document Type: Working paper
Year of publication: 2018
The title of a journal, publication series: ZEW Discussion Papers
Volume: 18-045
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: D21 , D44 , D82 , H57, L74,
Keywords (English): Oversight , procurement , screening , red tape , moral hazard
Abstract: We empirically investigate the effect of procurement oversight on contract outcomes. In particular, we stress a distinction between public and private oversight: the former is a set of bureaucratic checks enacted by contracting offices, while the latter is carried out by private insurance companies whose money is at stake through the socalled performance bonding. By focusing on the U.S. federal service contracts in the period 2005-2015, we exploit an exogenous variation in the threshold for the application of both sources of oversight in order to separately estimate their causal effects on execution costs and time. We find that: (i) private oversight has a positive effect on outcomes through the screening of bidders that alters the pool of winning firms; (ii) public oversight negatively affects outcomes, due to excessive red tape induced by low-competence buyers.

Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Giuffrida, Leonardo M. ; Rovigatti, Gabriele (2018) Can the private sector ensure the public interest? Evidence from federal procurement. Open Access ZEW Discussion Papers Mannheim 18-045 [Working paper]
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