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Mayor’s wage and Public procurement

Author

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  • Angelo D'Andrea
Abstract
In this paper I run a regression discontinuity design analysis to document the causal effect of mayor’s wage on procurement outcomes in a large data base of public procurement contracts in Italy.To identify the wage effect, I use peculiarities of the Italian legislation where mayor’s remuneration varies at pre-determined population thresholds. My main results are as follows. First, a higher wage (i.e., my treatment) is not related with differences in aggregate measures of procurement: number of tenders, total procurement expenditure and the mean value of the contract in the municipality. Second, some of the ex-ante procurement outcomes are positively affected by mayor’s wage: the number of admitted offers and final rebates on the reserve price. Finally, a higher wage causes a significant decrease in the probability that the same firm is awarded a contract repeatedly. This paper is the first to document a direct relationship between mayor’s salary and public procurement.

Suggested Citation

  • Angelo D'Andrea, 2019. "Mayor’s wage and Public procurement," BAFFI CAREFIN Working Papers 19125, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    • Handle: RePEc:baf:cbafwp:cbafwp19125
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    References listed on IDEAS

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    More about this item

    Keywords

    Public procurement; Local governments; Public wages;
    All these keywords.

    JEL classification:

    • H0 - Public Economics - - General
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories

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