Dangerous liaisons across levels of government in an emergency

Abstract

In this paper, we develop a theoretical model to evaluate the re-centralization of public procurement in an emergency under different collective choice mechanisms. We show that the equilibrium degree of centralization is the result of the interplay of three forces: (i) an “efficiency gain” effect, that works in favour of full centralization, since central government is likely to be more efficient than regional governments in purchasing goods on the market, and (ii) “dangerous liaisons” across levels of government, that work against centralization, because of (ii.a) the central government’s willingness to scapegoat failures on regional governments (“blame effect”), and (ii.b) the regional governments’ shame in delegating to the centre (“shame effect”). We have used the model to interpret the change in the governance of public procurement in Italy during the COVID-19 crisis. In fact, Italy, likewise many other countries around the world, responded to COVID-19 emergency with a mixed bag of centralized and decentralized measures that most likely reflected the particular ways in which politicians assumed blame and shame would work at different stages of the pandemic rather than their considerations on efficiency.