Unintended consequences of fighting corruption: judicial decisions for the award of public contracts in three Italian cities

Abstract

By building on Spiller (2008) and Moszoro and Spiller (2012), this paper analyses the implementation of the Italian Code of Public Contracts. Contracting authorities are expected to design tendering procedures strategically, using less discretion the higher the risk of third-party challenges, and more discretion the lower this risk. The analysis considers three cases: the municipalities of Milan, Turin and Rome. After assessing the potential for third-party challenges with measures of competitiveness of the economic environment where the municipalities are located, the paper sheds light on how the municipalities apply the Code, analysing judicial decisions that accept the reasons of the applicants on the awarding of public contracts issued by Regional Administrative Courts (2006-2018). Results confirm expectations on the strategic use of administrative discretion, and also reveal that the Code is generating litigation when the contracting authorities rigidly assess the moral and contributory requirements of the economic operators.