Katie Parry, Oriana Bandiera, Michael Best, Adnan Khan, Andrea Prat, 13 May 2020

Weak procurement systems can lead to high wastefulness and reduce the amount of resources government have for vital expenditures. This column examines the behaviour of 600 procurement officers in Pakistan and finds that the savings realised through giving them greater autonomy were considerably greater than from pay-for-performance incentive schemes, though this result did depend on the relative efficiency of the procurement officers and their monitors. This finding indicates that, counter-intuitively, the appropriate response to inefficiency and corruption may sometimes be less monitoring, not more.

Jeffrey Clemens, Parker Rogers, 10 March 2020

Why has medical innovation brought cost-increasing enhancements to quality, rather than cost-reducing advances in productivity? The column uses a new dataset drawn from patents for prosthetic devices to show that the design of incentives for innovators can have substantial effects on these margins. Fixed-price procurement arrangements induce greater effort to reduce production costs than cost-plus procurement arrangements. Procurement models may therefore inadvertently lead to 'missing innovations'.

Emanuele Colonnelli, Mouno Prem, Edoardo Teso, 08 September 2019

To protect public sector jobs from becoming instruments of political patronage, employment decisions must be governed by impartial, meritocratic hiring practices. But in many civil service systems, politicians retain broad discretion in personnel decisions. This column looks at hiring practices in Brazil, and finds that not only are public sector careers handed out to the most devoted campaign supporters rather than the most competent applicants, but that political connections aid the least capable applicants most.

Audinga Baltrunaite, Cristina Giorgiantonio, Sauro Mocetti, Tommaso Orlando, 26 July 2018

Public procurement outcomes crucially depend on the ability of the procuring agency to select high-performing suppliers. This column uses Italian data to explore how public administrator discretion affects public resource allocation. Greater discretion results in reallocation towards politically connected, low-performing firms. These adverse effects are driven by lower-quality procuring agencies.

Francesco Decarolis, Leonardo M. Giuffrida, Elisabetta Iossa, Vincenzo Mollisi, Giancarlo Spagnolo, 31 May 2018

Governments across the world procure a huge range of goods and services, and ensuring that procurement contracts are negotiated and executed properly can save a great deal of time and money. This column uses evidence from the US to show the effect of staff competence on procurement wastage. Improving the competence of bureaus to the 90thpercentile of the distribution would save an average of $102,619 and 54.5 days per contract.

Decio Coviello, Andrea Guglielmo, Giancarlo Spagnolo, 07 August 2016

Open competition is regarded as a crucial ‘preventative tool’ that limits government discretion and abuse of power when awarding procurement contracts. However, various studies have identified numerous drawbacks to using open auctions when contracting is imperfect. This column discusses the effects of increased buyer discretion on public procurement in Italy. Increased discretion raises the number of repeated wins by contractors, suggesting long-term relationships between buyers and sellers. Furthermore, productive buyer-seller relationships appear to outnumber corrupt ones.

Emmanuelle Auriol, Pierre Picard, 24 November 2009

Many rich countries have chosen to outsource public services. This column discusses the costs and benefits of such outsourcing policies and identifies when they improve welfare.

CEPR Policy Research