Does aid help improve economic institutions ?

Aid is expected to promote better living standards by raising investment and growth. But aid may also affect institutions directly. In theory, these effects may or may not work in the same direction as those on investment. The authors examine the effect of aid on economic institutions and find that aid has neither a positive nor a negative impact on existing measures of economic institutions. They find the results using pooled data for non-overlapping five-year periods, confirmed by pooled annual regressions for a large panel of countries and by pure cross-section regressions. The authors explicitly allow for time invariant effects that are country specific and find the results to be robust to model specifications, estimation methods, and different data sets.Development Economics&Aid Effectiveness,Public Institution Analysis&Assessment,Economic Theory&Research,Economic Policy, Institutions and Governance,School Health

Does Publicity Affect Competition? Evidence from Discontinuities in Public Procurement Auctions?

Calls for tenders are the natural devices to inform bidders, thus to enlarge the pool of potential participants. We exploit discontinuities generated by the Italian Law on tender's publicity to identify the effect of enlarging the pool of potential participants on competition in public procurement auctions. We show that most of the effects of publicity are at regional and European level. Increasing tenders' publicity from local to regional determines an increase in the number of bidders by 50% and an extra reduction of 5% in the price paid by the contracting authority; increasing publicity from national to European has no effect on the number of bidders but it determines an extra reduction of 10% in the price paid by the contracting authority. No effect is observed when publicity is increased from regional to national. Finally, we relate measures of competition to ex-post duration of the works finding a negative correlation between duration and the number of bidders or the winning rebate.Public Procurement Auctions, Publicity, Regression Discontinuity, Duration Analysis.

Does Publicity Affect Competition? Evidence from Discontinuities in Public Procurement Auctions

Calls for tenders are the natural devices to inform bidders, thus to enlarge the pool of potential participants. We exploit discontinuities generated by the Italian Law on tender’s publicity to identify the effect of enlarging the pool of potential participants on competition in public procurement auctions. We show that most of the effects of publicity are at regional and European level. Increasing tenders’ publicity from local to regional determines an increase in the number of bidders by 50% and an extra reduction of 5% in the price paid by the contracting authority; increasing publicity from national to European has no effect on the number of bidders but it determines an extra reduction of 10% in the price paid by the contracting authority. No effect is observed when publicity is increased from regional to national. Finally, we relate measures of competition to ex-post duration of the works finding a negative correlation between duration and the number of bidders or the winning rebate.Public Procurement Auctions, Publicity, Regression Discontinuity, Duration Analysis

Building Political Collusion: Evidence from Procurement Auctions

We investigate the relationship between the time politicians stay in office and the functioning of public procurement. To this purpose, we collect a data set on the Italian municipal governments and all the procurement auctions they administered between 2000 and 2005. Identification is achieved through the introduction of a two-term limit for the mayor in March 1993: since elections were not coordinated across cities, and previous terms were not counted in the limit, mayors appointed right before the reform could be reelected for two additional terms, while the others for one only. Our primary finding is that one extra term in office deteriorates public spending. In fact, it decreases the number of bidders and, most importantly, the winning rebate. Interestingly, we also find that the probability that the same firm is awarded more auctions, or that the winning firm is local, increases with time in office. These results are compatible with the predictions of a model of favoritism in repeated procurement auctions, where time reveals collusive types, thus increasing the value of illegal connections at the expense of higher procurement costs.procurement auction, collusion, public works, time in office

Weak Instruments and Weak Identification in Estimating the Effects of Education on Democracy

Is there any relation between education and democracy? Once we correct for weak instruments and identify education as `weakly exogenous` we find new evidence that education systematically predicts democracy. Our results are robust across model specification, instrumentation strategies, and samples.

Three Essays in Applied Economics.

The aim of this dissertation is to answer three real life economic questions with the following three chapters. Chapter 1, (joint with Matteo Bobba), deals with the problems of weak instruments in identifying the effects of education on democracy. This chapter shows that when the problems caused by weak instruments are properly considered Education affects Democracy. Chapter 2, (joint with Mario Mariniello), analyzes both theoretically and empirically what are the effects of potential competition on actual competition in public procurement auctions in Italy. A model of endogenous entry in auctions is adapted to inspect the theoretical problem and a regression discontinuity design is exploited to identify the causal effects of advertisement on entry and competition in this market. Chapter 3, (joint with Stefano Gagliarducci), explores the relationship between politics and the functioning of public procurements auctions in Italy. In particular, we use the introduction of the two-limit law in 1993 to identify the causal effect of political longevity in office, longer tenure of the mayors, on several outcomes of the auctions. The channel of discretional renegotiations appear to be the tools to distribute political favors which building entry barrier limits competition at the auction level.Government purchasing; Purchasing -- Management; Industrial procurement;

Don't Spread Yourself Too Thin: The Impact of Task Juggling on Workers' Speed of Job Completion

We show that task juggling, i.e., the spreading of effort across too many active projects, decreases the performance of workers, raising the chances of low throughput, long duration of projects and exploding backlogs. Individual speed of job completion cannot be explained only in terms of effort, ability and experience: work scheduling is a crucial "input" that cannot be omitted from the production function of individual workers. We provide a simple theoretical model to study the effects of increased task juggling on the duration of projects. Using a sample of Italian judges we show that those who are induced for exogenous reasons to work in a more parallel fashion on many trials at the same time, take longer to complete similar portfolios of cases. The exogenous variation that identifies this causal effect is constructed exploiting the lottery that assigns cases to judges together with the procedural prescription requiring judges to hold the first hearing of a case no later than 60 days from filing.individual production function, work scheduling, duration of trials

Tenure in office and public procurement

We study the impact of politicians' tenure in office on the outcomes of public procurement. To this purpose, we match a data set on the politics of Italian municipal governments to a data set on the procurement auctions they administered. In order to identify a causal relation, we apply two different identification strategies. First, we compare elections where the incumbent mayor barely won another term, with elections where the incumbent mayor barely lost and a new mayor took over. Second, we cross-validate these estimates using a unique quasi-experiment determined by the introduction of a two-term limit on the mayoral office in March 1993. This reform granted one potential extra term to mayors appointed before the reform. The main result is that an increase in the mayor's tenure is associated with ``worse'' outcomes: fewer bidders per auction, a higher cost of procurement, a higher probability that the winner is local and that the same firm is awarded repeated auctions. Taken together, our estimates are informative of the possibility that time in office progressively leads to collusion between government officials and a few favored local bidders. Other interpretations receive less support in the dat

The effect of discretion on procurement performance

We run a regression discontinuity design analysis to document the causal effect of increasing buyers' discretion on procurement outcomes in a large database for public works in Italy. Works with a value above a given threshold have to be awarded through an open auction. Works below this threshold can be more easily awarded through a restricted auction, where the buyer has some discretion in terms of who (not) to invite to bid. Our main result is that discretion increases the probability that the same firm wins repeatedly, and it does not deteriorate (and may improve) the procurement outcomes we observe. The effects of discretion persist when we repeat the analysis controlling for the geographical location, corruption, social capital and judicial efficiency in the region of the public buyers running the auctions