The performance of local government in the execution of public works

This paper aims at analysing the procurement of public works paying attention to the level of government involved. Such an issue has not received so far attention in the literature on fiscal federalism nor in the public works procurement literature. We focus the attention upon the execution stage of public works: indeed, their efficient provision and their capability to deliver the planned benefits are severely affected by the problems arising at the execution stage because of the incompleteness of the underlying contract. The main result is that local governments seem to be less efficient in the management of the execution process, suffering from longer delays than central government. This phenomenon is more severe for small municipalities and when the contract is mainly financed with external resources.