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Article
Court Efficiency and Procurement Performance
The Scandinavian Journal of Economics (2016)
  • Decio Coviello, HEC Montréal
  • Luigi Moretti
  • Giancarlo Spagnolo
  • Paola Valbonesi
Abstract
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.
Keywords
  • 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)
Available at: http://works.bepress.com/paola_valbonesi/47/