1,720,977 research outputs found
University choice, peer group and distance
Full text linkWe analyze how authorizing a new university affects welfare when the students’ education depends on the peer group effect. Students are horizontally differentiated according to their ability and the distance from the university. Comparing a monopolistic university with a two-universities model we find that allowing a “new” university is welfare improving when the monopolistic university is only attended by able students with less mobility constraints. This occurs when mobility costs are sufficiently high. When mobility costs are low, a negative externality arises and welfare decreases. The negative externality comes through the peer group effect: high ability students that would have gone to the monopolistic university go to the university with the lower average ability. These students end up in a university with students whose ability was not high enough to go to the monopolist. On the other hand, students remaining in the good university benefit from a lower average ability. Thus, a new university is welfare improving only for those with low ability that in the monopolistic scenario would remain unskilled. When, instead, the mobility cost is high, the monopolist leaves out a significative mass of individuals. In this case, no negative externality arises because no student swaps university therefore a "new" university is welfare improving. However, this welfare improvement makes the opportunities for a higher education less equal (according to Romer, 1998) because an "external circumstance" like mobility cost, rather than own ability, becomes the main determinant of the students’ human capital
Inter-municipal Cooperation in Public Procurement
No full textThis paper assesses the effects of intermunicipal cooperation on public procurement (PP) performance,
based on the Italian experience. We estimate a fixed effect regression model using a sample of 50,905
Italian public works contracts awarded both by municipalities and by municipal unions (MU) from 2012 to
2021. Results prove MU are more efficient than single municipalities at the execution, rather than the
winning stage, of the tender. Public tenders awarded by MU show lower winning rebates, shorter delivery
delays and, for less complex works, lower final execution extra costs. Furthermore, we investigate whether
intergovernmental transfers may enhance PP performance
Peer group and distance: when widening University participation is better
Get PDFWe study the effect of a new university in a two-city model in which individuals’ utility depends on own ability, peer group ability, formal education and mobility costs. We compare a monopoly (one university in one city) with a two-university system (one university in each city). Introducing the second university improves welfare when the fixed cost of each university is low. With two universities, we obtain a symmetric equilibrium for every mobility cost and asymmetric equilibria for low mobility costs. The symmetric system induces the highest welfare and is also Strong Nash (for high mobility costs)
Intermunicipal cooperation in public procurement
Full text linkThis study evaluates the impact of intermunicipal cooperation on public procurement (PP) performance, based on the Italian experience. We use both a fixed-effects regression model and alternative matching estimators to analyse a sample of 50,905 Italian public works contracts awarded by municipalities and municipal unions (MUs) between 2012 and 2020. Our results indicate that while local centralisation does not necessarily lead to significant cost savings in the procurement phase, MUs outperform individual municipalities in the execution phase, especially in terms of reducing delivery delays. We conclude that while MUs do not necessarily lead to strong economies of scale, they do improve efficiency during contract execution. This highlights the alternative benefits of PP centralisation beyond cost savings
Public procurement with unverifiable quality: The case for discriminatory competitive procedures
Full text linkUnverifiable quality may affect the enforcement of procurement contracts even when the award procedure is able to select the most efficient firm in the market. In this paper, we show that a discriminatory competitive mechanism – which awards the contract on the basis of price and (firms') past performance – yields an efficient allocation of the contract and allows the buyer to implement her desired quality. Quality enforcement arises out of relational contracting whereby the buyer ‘handicaps' a contractor in future competitive tendering processes if it fails to provide the required quality. We study an infinitely repeated procurement model with two firms and one buyer imperfectly informed on the firms' cost, in which, in each period, the buyer runs a discriminatory auction. We restrict our analysis to the case of a buyer committed to her handicapping strategy, a case which captures some of the features of a public buyer. When players use either grim trigger or stick-and-carrot strategies, we find that the buyer can induce the delivery of optimal (unverifiable) quality with a variety of handicap levels and, when applicable, durations of the punishment period; for some values of the handicap and the length of the punishment period, both firms remain active in the market even when punished
Regulating unverifiable quality by fixed-price contracts
Full text linkWe apply the idea of relational contracting to a simple problem of regulating a single-product monopoly with unverifiable (then ex ante not contractible) quality. We model the interaction between the regulator and the firm as an infinitely repeated game; we observe that there exist self-enforcing contracts in which the regulator, using her discretionary power on the price (the contractible variable) can induce the firm to produce the required quality level by leaving it a positive rent. When players use grim trigger strategies, the optimal self-enforcing contract implies a distortion from the second best which is greater the more impatient is the firm and the larger is the effect of the price on the deviation profits. Whenever the equilibrium profits of the static game are strictly positive, even if the firm were infinitely patient, the optimal contract would not reach the second-best: it would ensure a quality-adjusted Ramsey condition and, at the same time, leave positive profits to the firm. We extend the model in a few ways: we find that when players use stick-and-carrot strategies, with an infinitely patient firm the second-best outcome is reached even if this implies to punish the deviating firm with negative profits. When instead the regulator is unable to perfectly monitor the firm’s quality choice, the price/quality pair giving the highest payoff to the regulator does not directly depend on the firm’s discount factor, which instead affects the probability of punishment. Our results suggest that, in fixed price regulatory contracts, the regulatory lag should be shorter the more relevant is the issue of unverifiability, in order to reduce the reward for opportunistic behavior by the firm
Local university supply and distance: a welfare analysis with centralized and decentralized tuition fees
No full textWe consider a two-city model in which two university systems may occur: a centralized system in which a social planner sets the tuition fee and a decentralized system in which universities are free to set their own fees. Within these two systems we also analyze two further scenarios, one with only one university and another with one university in each city. Individuals with heterogeneous innate ability decide whether to go to university according to the average ability (peer group effect henceforth), a tuition fee and mobility costs, if any. In the centralized system, the welfare is maximized by opening two free-of-fees universities, one in each city. This maximizes university participation and eliminates the impediment of mobility costs. In the decentralized system, whether a single-university or a two-university system is more welfare enhancing depends on the mobility costs. When mobility costs are sufficiently low, then having only one university is welfare maximizing. When, instead, mobility costs are high, two universities result to be welfare enhancing
Corruption in environmental policy: the case of waste
No full textThis paper investigates interactions between waste and enforcement policies in the presence of a corruptible bureaucrat. We set up a repeated game obtained by an infinite repetition of a three stage game, where a firm producing illegal waste can bribe a bureaucrat in charge of monitoring its disposal choices. The bureaucrat may accept or not the bribe and chooses whether to hide illegal waste disposal to a national waste authority. We study conditions under which corruption can arise in equilibrium, and find that illegal disposal is larger under corruption, while, surprisingly, the bribe does not necessarily decrease with the punishment for detected corruption. Finally, our analysis suggests that increasing the interactions between the regulated firm and the bureaucrat increases illegal disposal via corruption
The sustainability of the social security system: a comparison between Italy and Spain
No full textLa sostenibilidad del sistema de seguridad social sigue siendo uno de los temas más relevantes en las agendas de los decisores europeos. La importancia del tema deriva de su naturaleza decididamente interdisciplinaria. Este trabajo parte de la evidencia empírica y propone una síntesis entre la evaluación económico-financiera, social, implementación política y visión de la sociedad. A partir de la evolución del dato demográfico, el trabajo propone un análisis de la sostenibilidad no solo vinculado a un indicador, sino en la más amplia perspectiva de qué estructura social inspira las reformas del sistema de protección social europeo. Relativamente al sistema de pensiones, el artículo se detiene en el paso del sistema de retribución al sistema de contribución. El primero, sobre la base de un pacto intergeneracional, permitía sortear las ineficiencias inevitables del mercado laboral, sobre todo en países donde el salario depende de un efecto conjunto de ingreso y educación familiar. El segundo, bajo el vínculo de la sostenibilidad, se basa en la hipótesis de un funcionamiento eficiente del mismo, libre de imperfecciones que influyan en las dinámicas salariales, donde el pacto generacional se rompe.The sustainability of the social security system remains one of the most important items on the agendas of European decision-makers. The importance of the subject arises from its decidedly interdisciplinary nature. This paper is based on empirical evidence and proposes a synthesis between economic-financial and social evaluation, political implementation, and vision of society. Based on the evolution of demographic data, the paper proposes an analysis of sustainability not only linked to an indicator, but in the broader perspective of which social structure is inspiring the reforms of the European social protection system. With regard to the pension system, the article focuses on the transition from a pay-as-you-go system to a contributory system. The first, based on an intergenerational pact, made it possible to overcome the inevitable inefficiencies of the labour market, especially in countries where wages depend on a combined effect of income and family education. The second, under the link of sustainability, is based on the hypothesis of an efficient operation of the system, free from imperfections that influence salary dynamics, where the generational pact is broken
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