Indirect savings from public procurement centralization
File(s)
Accepted version
Author(s)
Lotti, Clarissa
Muco, Arieda
Spagnolo, Giancarlo
Valletti, Tommaso
Type
Journal Article
Abstract
Centralization of public procurement can lower prices for the government's direct purchase of goods and services. This paper focuses on indirect savings. Public administrations that do not procure directly through a central procurement agency might benefit from the availability of centrally procured goods. We exploit the introduction of a central purchasing agency in Italy and find that prices came down by 22 percent among administrations that bought autonomously. These indirect effects appear to be driven by informational externalities, especially for less competent public buyers purchasing technologically more complex goods. Accounting for indirect savings increases the estimate of direct ones.
Date Issued
2024-08
Date Acceptance
2023-11-29
Citation
American Economic Journal: Economic Policy, 2024, 16 (3), pp.347-366
ISSN
1945-7731
Publisher
American Economic Association
Start Page
347
End Page
366
Journal / Book Title
American Economic Journal: Economic Policy
Volume
16
Issue
3
Copyright Statement
Copyright 2024 American Economic Association. All rights reserved. This is the author’s accepted manuscript made available under a CC-BY licence in accordance with Imperial’s Research Publications Open Access policy (www.imperial.ac.uk/oa-policy)
License URL
Identifier
https://www.aeaweb.org/articles?id=10.1257/pol.20220357&&from=f
Publication Status
Published
Date Publish Online
2024-08