Does a more competent public bureaucracy contribute to better economic outcomes? We address this question in the context of the US federal procurement of services and works by combining contract-level data on procurement performance and bureau-level data on competence and workforce characteristics. Using an instrumental variable strategy, we find that an increase in bureau competence causes a significant and economically important reduction in: i) delays, ii) cost overruns, and iii) number of renegotiations. Cooperation within the office appears to be a key driver of the findings.

Decarolis, Francesco, Leonardo Maria Giuffrida, Elisabetta Iossa, Vincenzo Mollisi and Giancarlo Spagnolo (2018), Bureaucratic Competence and Procurement Outcomes, NBER Working Paper No. 24201. Download

Authors

Decarolis, Francesco
Giuffrida, Leonardo Maria
Iossa, Elisabetta
Mollisi, Vincenzo
Spagnolo, Giancarlo

Keywords

Buyer quality, competence, procurement, public management, state capacity.