DP14856 Delays at the Border: Court Efficiency and Delays in Public Contracts

Author(s): Francesco Decarolis, Gianpiero Mattera, Carlo Menon
Publication Date: June 2020
Keyword(s): Court efficiency, public procurement, Quantile regression, spatial discontinuity
JEL(s): H11, H57, K41
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=14856

The inefficiency of the judicial system might affect the extent of delays in the execution of public contracts. We leverage on the large variation in the average length of civil proceedings across Italian jurisdictions and a granular dataset of public contracts to apply a border-discontinuity design strategy. Using a quantile regression approach, we uncover a non-linear, causal effect of court inefficiency: slower courts decrease delays at the lowest two deciles of the delay distribution, and increase delays in the top three deciles of the distribution. These findings fit a framework where contract enforcement is a key driver of contract performance.