Vol.:(0123456789) Italian Economic Journal https://doi.org/10.1007/s40797-019-00111-1 1 3 RESEARCH PAPER - ITALY AND EUROPE Does Institutional Quality Matter for Infrastructure Provision? A Non‑parametric Analysis for Italian Municipalities Marina Cavalieri 1  · Calogero Guccio 1  · Domenico Lisi 1  · Ilde Rizzo 1 Received: 22 January 2019 / Accepted: 14 September 2019 © Società Italiana degli Economisti (Italian Economic Association) 2019 Abstract This study explores the relationship between different dimensions of regional insti- tutional quality and the efficient provision of transport infrastructure. A two-stage semi-parametric approach is applied to a large sample of public works procured by about 1700 Italian municipalities in the 2000–2014 period. First, we estimate the performance in contract execution; then, we test the impact of different meas- ures and dimensions of institutional quality at both regional and provincial level. The results provide evidence that the quality of institutional environment matters in infrastructure procurement, though some specific dimensions of institutional quality appear to be more relevant than others in affecting performance in contract execu- tion. Overall, the estimates are robust to alternative measures of institutional quality, alternative model specifications, and different sample selections. Keywords Efficiency · Non-parametric methods · Semi-parametric truncated regression · Municipalities · Institutional quality · Public works contracts JEL Classification O18 · D73 · H57 · C14 1 Introduction Public procurement is a matter of intensive discussion globally because of the large amount of public resources involved and the problems related to its performance. 1 Indeed, public works are often a prerequisite for public and private investments that are important for the accumulation of economic and social capital in local territories. * Calogero Guccio guccio@unict.it 1 Department of Economics and Business, University of Catania, Catania, Italy 1 The Organization for Economic Co-operation and Development (OECD) estimates that public procure- ment accounts for 29% of general government expenditure; 63% of total procurement spending across OECD countries pertains to state and local governments (OECD 2015).