REPCOR - The Role of Reputation and Corruption in Procurement

Nearly all activities in which the public sector is involved, from defense to transportation, from education to healthcare, require the public sector to procure works or goods from private contractors. Thus, it is crucial that the procedures through which procurement occurs be designed to avoid waste and enhance social welfare. Preventing corruption and ensuring contractor compliance with their obligations constitute primary design goals. Nevertheless, very limited evidence exists as to how different awarding methods are susceptible to corruption, and how contractors’ past reputation should be used toaward new tenders.

This research proposal describes three empirical projects that will advance the frontier of our understanding of the roles of corruption and reputation in procurement.

• Component 1 focuses on the use of reputation in contract procurement. It analyzes the evidence produced by the introduction of a vendor rating system to: i) determine whether the new system induced contractors to improve their performance, ii) determine whether performance improvements caused higher procurement costs, and iii) evaluate concerns on corruption and entry of new bidders.
• Component 2 focuses on corruption in public procurement. It analyzes evidence on the presence of networks of firms engaged in criminal activities in public procurement to determine: i) the extent of the phenomenon, (ii) the functioning of different awarding rules against corruption, and iii) the use of tests to detect corruption.
• Component 3 focuses on healthcare procurement regulations. It analyzes evidence on the public procurement of medical devices to accomplish: i) a descriptive analysis of the procurement practices across the EU, ii) an assessment of whether discretionary awarding rules are used to foster corruption or to reward contractors with better reputation, and iii) an evaluation of these procurement practices in terms of patients’ welfare.

• “Buyers' Role in Innovation Procurement,” (with G. de Rassenfosse, L. Giuffrida, E. Iossa, V. Mollisi, E. Raiteri and G. Spagnolo), Journal of Economics & Management Strategy
   
• "Bureaucratic Competence and Procurement Outcomes" (with Leonardo M Giuffrida, Elisabetta Iossa, Vincenzo Mollisi, Giancarlo Spagnolo),The Journal of Law, Economics, and Organization
   
• "Total knee arthroplasty in Italy: reflections from the last fifteen years and projections for the next thirty", (with Emilio Romanini, Ilaria Luzi, Gustavo Zanoli, Michele Venosa, Paola Laricchiuta, Eugenio Carrani & Marina Torre), International Orthopaedics, volume 43, pages133–138 (2019)
   
• “Emergency procurement and the Covid19 crisis: insights from Italian administrative data,” (with C. Lotti, F. Marazzi and G. Spagnolo) CEPR Handbook on Public Procurement, O. Bandiera, E. Bosio and G. Spagnolo editors
   
• “The Role of Buyers’ Competence,” (with L. Giuffrida, E. Iossa and V. Mollisi) CEPR Handbook on Public Procurement, O. Bandiera, E. Bosio and G. Spagnolo editors
   
• “Appalti e Corruzione: Alcune Evidenze sulla Penetrazione Criminale negli Appalti di Lavori,” (with P. Pinotti) Il Diritto dell’Economia, n.3, 2021.

• “Gender and bureaucratic corruption: Evidence from two countries” (with R. Fisman, P. Pinotti, S. Vannutelli and Y. Wang) NBER Working Paper 28397 2021, 
   
• “Past Performance and Procurement Outcomes” (with R. Pacini and G. Spagnolo), NBER Working Paper No. 22814
   
• “Delays at the Border: Court Efficiency and Delays in Public Contracts” (with C. Menon and G. Mattera), CEPR Discussion Paper 14856. 
   
• “Corruption Red Flags in Public Procurement: New Evidence from Italian Calls for Tenders,” (with C. Giorgiantonio) Bank of Italy Discussion Papers (QEF), 2019 
   
• “Procuring Medical Devices: Evidence From Italian Public Tenders” (with V. Atella). CEPR Discussion Paper 14044
   
• “Procuring Medical Devices: The Price Effect of Mergers among Orthopedic Prostheses Producers” (with V. Atella and N. Ceschin)
   
• “Procurement Centralization in the EU: The Case of Italy,” (with L. Castellani and G. Rovigatti) CEPR Discussion Paper 12567, 2018