Delays at the Border: Court Efficiency and Delays in Public Contracts

Abstract

This study assesses the causal effect of the inefficiency of the judicial system on the delay in the execution of public contracts. We apply a border-discontinuity design that leverages the variation in the length of civil proceedings across Italian jurisdictions and a granular dataset of public contracts. Using a quantile regression approach, we uncover a non-linear effect of court inefficiency: slow courts lead to further delay for long-overdue contracts, and to less delay for works that are on track (or short-overdue). We argue that these results are consistent with a setting in which inefficient judiciaries have opposite effects on contractors’ expected gains from suing the contracting authority depending on the extent of the delay in delivering the contract.