Indirect savings from public procurement centralization
By: Lotti, C. Muço, A. Spagnolo, G. and Valletti, T
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Material type: 
BookPublisher: American Economic Journal: Economic Policy Description: 16(3), Aug, 2024: p.347-366.
In:
American Economic Journal: Economic PolicySummary: 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.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/pol.20220357
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
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Articles
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Indian Institute of Public Administration | 16(3), Aug, 2024: p.347-366 | Available | AR133262 |
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.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/pol.20220357
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