Is competition able to counteract the inefficiency of corruption? The case of Italian public works

The aim of this paper is to provide an empirical test of the role of competition in procurement in reducing the effects of corruption. For this purpose, the paper examines whether competition is able to constrain the waste effects of corruption on the efficiency of execution of public works, building on the results provided by Finocchiaro Castro et al. Int Tax Pub Fin 21(4):813–843, (2014). For this purpose, a two-stage analysis is carried out. In the first stage, a non-parametric approach (data envelopment analysis—DEA) investigates the relative efficiency of each public work execution; in the second stage, the determinant factors of the variability of efficiency scores are investigated. Our results show that increasing competition reinforces the negative effects of environmental corruption on public works execution.