Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/271918 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10274
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Centralization of public procurement can lower prices for the government's direct purchase of goods and services. This paper focuses on indirect savings. Public administrations that do not procure directly through a central procurement agency might benefit from the availability of centrally-procured goods. We exploit the introduction of a central purchasing agency in Italy and find that prices came down by 22% among administrations that bought autonomously. These indirect effects appear to be driven by informational externalities, especially for less competent public buyers purchasing technologically more complex goods. Accounting for indirect savings increases the estimate of direct ones.
Subjects: 
centralization
informational externalities
procurement
public contracts
JEL: 
D44
H11
H57
H83
L38
L88
Document Type: 
Working Paper
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