Judicial performance and public procurement choice

This paper investigates whether judicial performance influences the choice of procurement procedures adopted by public authorities. Using data on Italian municipal public works contracts between 2009 and 2012, it examines the choice between negotiated procedures and formal tendering mechanisms in a range where both options were legally available. Identification relies on a spatial discontinuity design that exploits exogenous variation in judicial delay across court jurisdictions, further refined through intra-regional border comparisons and coarsened exact matching. The results show that longer judicial delays significantly reduce the likelihood of using negotiated procedures and increase the use of formal auctions. Consistent with a growing body of literature showing that inefficient courts increase contractual uncertainty, we argue that poor judicial performance shifts procurement choices toward highly formalized procurement mechanisms rather than more discretionary and market-oriented forms of contracting. In this sense, formal procurement procedures may partially compensate for weak judicial enforcement by shifting transaction governance toward greater ex-ante specification, procedural control, and verifiability. More broadly, the paper suggests that judicial ineffectiveness may contribute to the expansion of bureaucratic controls, shifting governance away from market-based arrangements and toward increasingly proceduralized administrative structures.