Active and Passive Waste in Government Spending:

Evidence from a Policy Experiment

Oriana Bandiera, Andrea Prat, and Tommaso Valletti

尹燕飞

Puzzled thing: High price? Inefficiency or bribe?

Active Waste ---direct benefit for decision maker （ bribe ）Passive Waste ---not benefit for decision maker （ Inefficiency ）Aim： This paper proposes a distinction between active waste and

passive waste in determining the cost of public services.

Identifying the behavior:

• two channels• Market: Consip: fixed catalog and price

Non-consip: P is a function of : (1)the propensity of active waste; (2)the ability to avoid passive waste.

Facing high price:

through Consip passive waste

through market active waste

II. The Model

Manager pays ：

Object function ：

F.O.C.

( , )igt gt igt ip f b

igt igt i igtp b

( , )gt igt i iigt

f bb

igt igtiigtp b

• Proposition 1: If there is no Consip deal, the price paid by public body i is an increasing function of both the passive waste parameter i and the active waste parameter

i

p

Consip exists

• Not from Consip

• From consip

c cigt igtgtp v

( , ) ( , )n cigt igt i gt igt i igtgtf b h p b b

( , )igt igt igtp f b ( , )cgt igth p b

• Proposition 2: If a Consip deal is active, the probability that public body i buys from Consip is an increasing function of the passive waste parameter i and a decreasing function of the

active waste parameter βi.

s

Prove

ss

Proposition 3

S P

当各个 PB 之间的 PW 一样，而AW 差别比较大时

AW(b) 的减函数 b

AW （ b ）的增函数 b

S 与 P 负相关

当各个 PB 之间的 AW 一样，而PW 差别比较大时

PW(u) 的增函数 u

PW(u) 的增函数 u

S 与 P 正相关

Figure 1. Model Prediction

• 因此，关键在于 P 与 S 的相互关系：

• 若 P 与 S 正相关， PW 其主导作用；

• 若 P 与 S 负相关， AW 其主导作用

Main findings

1. The average prices paid by different Italian public bodies vary substantially.

2. Differences across public bodies are correlated with institutional characteristics.

3. Pay higher prices when buying from Consip is not feasible are more likely to

buy from Consip passive waste

4.At least 82 percent of estimated waste is passive in Italy.

5. low active waste high passive waste not trade-off

Institutional Background and the Policy Experiment

• A. Types of Public Bodies(PB) Napoleonic bodies US-style local bodies Semi-autonomous bodies B. Consip

Alternative Theories

1.Validity of Proposition 2 ? Bribee reverse to Consip No reports of judicial use of Consip information 2.Active waste through Consip?

IV Data Description21 goods by 208 PBs over the 00-05 period

v. Empirical Analysis

A. Price Differences Different PBs buy the same goods, is there any price differences?

B. Reduced-Form Estimates: differences in Active Waste and Passive Waste

• u>> Pro1 P• S Pro3• Pro2 P 与 S 正向关系 • >> u Pro1 P• S Pro3 P 与 S 负向关系 • Pro2

C.Model Estimate