Devil in the Details and Public Value : A Cost-Effectiveness Analysis of Wasteful Government Spending Using Armored Cars

Inefficient procurement practices, such as those of armored cars, can be characterized as wasteful spending from a social opportunity cost perspective. I argue that the use of efficiency and effectiveness measures can be reconciled with a public value perspective. Discussing the implications of concepts such as (un)productive spending, I raise concerns about practical implications derived from endogenous growth models and argue in favor of a case-study approach for better policies. I propose a simple model and advance the hypothesis that misallocation of resources is related, i.a. to narratives that are linked to tacit and indirect rent-seeking practices that undermine public value. Building on a small yet detailed unique dataset of car purchases and leases in Colombia, I introduce a cost-effectiveness index and find that the State can save ca. 0.46% of its total annual budget by adjusting narrative-driven practices alone in armored car procurement