Bureaucratic Competence and Procurement Outcomes

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,