The effects of mafia infiltration on public procurement perofrmance.
In this paper, the researchers examine the effects of Mafia infiltration on public procurement performance, based on a sample of 68,063 public work contracts (PWC) awarded by Italian municipalities over the period
687 PWC are identified as Mafia-infiltrated, either because of being awarded by municipal councils subsequently dissolved due to Mafia infiltration, or because of being won by Mafia-owned firms.
The results reveal that Mafia infiltration is positively associated with number of submitted bids, awarding rebates and execution cost overruns, whereas it is negatively associated with delivery delays for PWC. The effect of Mafia infiltration on execution cost overruns and the probability of their occurrence is weaker for larger PWC, and the elections of the new municipal councils, after the dissolution of the previous ones, do not significantly influence the performance of PWC.
The findings suggest the presence of collusive schemes among bidding firms within the Mafia network and provide new insights for the implementation of more sound policies to tackle practices associated with Mafia infiltration in public procurement.
This article was published in European Journal of Political Economy.
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