Bureaucratic Competence and Procurement Outcomes

To what extent 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. We use the death occurrences of specific types of employees as instruments and nd that an increase in bureau competence causes a signifi cant and economically important reduction in: i) time 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 (2020), Bureaucratic Competence and Procurement Outcomes, The Journal of Law, Economics, and Organization 36(3) , 537-597