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Court Efficiency and Procurement Performance
The Scandinavian Journal of Economics (2016)
  • Decio Coviello, HEC Montréal
  • Luigi Moretti
  • Giancarlo Spagnolo
  • Paola Valbonesi
Disputes over penalties for breaching a contract are often resolved in court. A simple
model illustrates how inecient courts can sway public buyers from enforcing a penalty
for late delivery in order to avoid litigation, therefore inducing sellers to delay contract
delivery. By using a large dataset on Italian public procurement, we empirically study
the e ects of court ineciency on public work performance. We nd that where courts
are inecient: i) public works are delivered with longer delays; ii) delays increase for
more valuable contracts; iii) contracts are more often awarded to larger suppliers; and
iv) a higher share of the payment is postponed after delivery. Other interpretations
receive less support from the data.
  • court efficiency,
  • public procurement,
  • time incentives,
  • delay,
  • performance in contract execution,
  • litigation
Publication Date
Winter October 7, 2016
Citation Information
Decio Coviello, Luigi Moretti, Giancarlo Spagnolo and Paola Valbonesi. "Court Efficiency and Procurement Performance" The Scandinavian Journal of Economics (2016)
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