Disputes over penalties for breaching a contract are often resolved in court. A simple model illustrates how inefficient courts can sway public buyers from enforcing a penalty for late delivery in order to avoid litigation, thereby inducing sellers to delay contract delivery. By using a large dataset on Italian public procurement, we empirically study the effects of court inefficiency on public work performance. Where courts are inefficient, we find the following: public works are delivered with longer delays; delays increase for more valuable contracts; contracts are more often awarded to larger suppliers; and a higher share of the payment is postponed after delivery. Other interpretations receive less support from the data.

(2018). Court Efficiency and Procurement Performance [journal article - articolo]. In SCANDINAVIAN JOURNAL OF ECONOMICS. Retrieved from http://hdl.handle.net/10446/201294

Court Efficiency and Procurement Performance

Moretti, Luigi;
2018-01-01

Abstract

Disputes over penalties for breaching a contract are often resolved in court. A simple model illustrates how inefficient courts can sway public buyers from enforcing a penalty for late delivery in order to avoid litigation, thereby inducing sellers to delay contract delivery. By using a large dataset on Italian public procurement, we empirically study the effects of court inefficiency on public work performance. Where courts are inefficient, we find the following: public works are delivered with longer delays; delays increase for more valuable contracts; contracts are more often awarded to larger suppliers; and a higher share of the payment is postponed after delivery. Other interpretations receive less support from the data.
articolo
2018
Coviello, Decio; Moretti, Luigi; Spagnolo, Giancarlo; Valbonesi, Paola
(2018). Court Efficiency and Procurement Performance [journal article - articolo]. In SCANDINAVIAN JOURNAL OF ECONOMICS. Retrieved from http://hdl.handle.net/10446/201294
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10446/201294
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