Italian NRRP improves public procurement awarding
A Banca d'Italia study examines how incentives and organizational innovations affect public administration performance, focusing on Italy's National Recovery and Resilience Plan (NRRP). The NRRP significantly improved procurement awarding, especially due to its performance-oriented approach and a qualification system for contracting authorities.
Performance-oriented approach boosts awarding
The study reveals that Italy's NRRP significantly improved public procurement awarding outcomes.
Contracts under the NRRP had an 88 percent probability of being awarded, 19 percentage points higher than comparable non-NRRP contracts.
They were also awarded approximately 10 days faster, representing a 19 percent reduction in time.
This improvement was largely driven by the NRRP's performance-oriented approach, which established clear funding conditionality based on project achievement.
Furthermore, the qualification system for procuring authorities amplified these positive effects.
However, the study found no appreciable effects on the subsequent progress of projects, likely due to a lack of adequate performance incentives for private counterparts in the NRRP's design.
This highlights a critical gap in the execution phase.
NRRP's distinctive governance model
The Italian National Recovery and Resilience Plan (NRRP) represents an unprecedented investment program coupled with a distinctive governance model for project delivery.
This model integrates performance-based conditionality, simplified procedures, a qualification system for contracting authorities, and economic incentives to accelerate project awarding and commencement.
The research employed a two-step empirical design to evaluate the NRRP's impact.
It compared NRRP and non-NRRP contracts within the same municipality and year, isolating contract-level effects.
Subsequently, it examined broader changes in procurement performance beyond directly treated contracts, suggesting organizational learning within public administrations.
A blueprint with a blind spot
The study offers a blueprint for effective public investment, showing that targeted incentives and reforms boost administrative capacity.
Yet, it critically reveals a blind spot: inadequate performance incentives for private counterparts limit overall project success.
True impact demands extending performance mechanisms across the entire public-private delivery chain.