Active and Passive Waste in Government Spending: Evidence from a Policy Experiment
Open accessAbstract
We propose a distinction between active and passive waste as determinants of the cost of public services. Active waste entails utility for the public decision maker, whereas passive waste does not. We analyze purchases of standardized goods by Italian public bodies and exploit a policy experiment associated with a national procurement agency. We find that: (i) some public bodies pay systematically more than others for equivalent goods; (ii) differences are correlated with governance structure; (iii) the variation in prices is principally due to variation in passive rather than active waste; and (iv) passive waste accounts for 83 percent of total estimated waste. (JEL H11, H57, H83)
Integrity signals
Registry
Cites
Statistics
Claims the paper makes
Claims other papers make about this one
Each is checked against this paper’s own text: does it say what the citing paper says it does?
Incompetence-driven inefficiency is one of the main causes of waste of government spending.
“Incompetence-driven inefficiency is one of the main causes of waste of government spending (Bandiera, Prat and Valletti, 2009[10]).”
From Professionalising the public procurement workforce (2023) · cites this paper as Bandiera, Prat and Valletti, 2009[10]
Cited by
Sorted by citations
Lewis-Faupel, S., Neggers, Y., Olken, B. A., & Pande, R. (2016) · American Economic Journal: Economic Policy · doi:10.1257/pol.20140258 · Cited by 194 · see citing works
Professionalising the public procurement workforce
(2023) · OECD Public Governance Policy Papers · doi:10.1787/e2eda150-en · Cited by 167 · see citing works
Lights on the shadows of public procurement: Transparency as an antidote to corruption
Bauhr, M., Czibik, Á., de Fine Licht, J., & Fazekas, M. (2020) · Governance · doi:10.1111/gove.12432 · Cited by 131 · see citing works
Bureaucratic Competence and Procurement Outcomes
Decarolis, F., Giuffrida, L., Iossa, E., Mollisi, V., & Spagnolo, G. (2018) · doi:10.3386/w24201 · Cited by 88 · see citing works
The impact of e-procurement on institutional quality
Mélon, L., & Spruk, R. (2020) · Journal of Public Procurement · doi:10.1108/jopp-07-2019-0050 · Cited by 33 · see citing works
The Impact of Professionalization in Public Procurement – evidence from a case study
Antonietta Coppola, M., & Piga, G. (2019) · European Journal of Public Procurement Markets · doi:10.54611/nlre4256 · Cited by 5 · see citing works
- Authors
- Bandiera, O., Prat, A., & Valletti, T.
- Affiliations
- London School of Economics and Political Science (GB)
- University of Rome Tor Vergata (IT)
- Venue
- American Economic Review
- Publisher
- American Economic Association
- Published
- 2009-08-01
- Volume
- 99
- Issue
- 4
- Pages
- 1278-1308
- ISSN
- 0002-8282 (ISSN-L)
- OpenAlex
- W1964939538
- Cited by
- 534
- References
- 0
- Citations by year
- 2026: 30 · 2025: 31 · 2024: 67 · 2023: 34 · 2022: 31 · 2021: 55 · 2020: 50 · 2019: 30 · 2018: 26 · 2017: 34 · 2016: 29 · 2015: 30 · 2014: 19 · 2013: 20 · 2012: 19
- FWCI
- 36.52
- Type
- journal article
- Language
- en
- Open access
- green
- doi.org
- Locations
- American Economic Review (publishedVersion)
- SSRN Electronic Journal (acceptedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Cineca Institutional Research Information System (Tor Vergata University) (submittedVersion, other-oa)
- Topics
- Social Sciences › Business, Management and Accounting › Strategy and Management › Public Procurement and Policy
- Social Sciences › Political Science and International Relations › Local Government Finance and Decentralization
- Social Sciences › Decision Sciences › Management Science and Operations Research › Auction Theory and Applications
- Keywords
- government spending, public procurement, procurement agencies, governance structures, public decision-makers, price fluctuations, policy experiments
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
