Procurement centralization in the EU: the case of Italy

This paper analyzes the process of centralization of public procurement in Europe, with an emphasis on the Italian case. It illustrates the main normative and regulatory reforms that took place between 2000 and 2016 at both EU and Italian levels. It then empirically evaluates the potential distortions induced by the most recent wave of centralization reforms. Using procurement data on all Italian public contracts awarded between 2015 and 2017, it finds that administrations expecting to lose their ability to contract independently game the centralization requirements in three ways. In the short run, they anticipate their purchases to avoid delegating to a central body. In the longer run, they both manipulate contract values, breaking down purchases into smaller lots of amounts below the thresholds driving centralization requirements, and, when given the option, aggregate into the smallest types of centralized purchasing bodies. These three distortions partially offset the potential benefits of the centralization reforms.