Tenure in Office and Public Procurement

Abstract

We study the impact of politicians' tenure in office on the outcomes of public procurement using a dataset on Italian municipal governments. To identify a causal relation, we first compare elections where the incumbent mayor barely won or barely lost another term. We then use the introduction of a two-term limit, which granted one potential extra term to mayors appointed before the reform. The main result is that an increase in tenure is associated with “worse” procurement outcomes. Our estimates are informative of the possibility that time in office progressively leads to collusion between government officials and local bidders. (JEL D72, H57, H76)