LAW AND ECONOMICS
Procurement, Partnerships and Corruption
Updated A.Y. 2021-2022
LINK IN TEAMS
Law and Economics
Master of Science in Economics
Academic year 2021-2022
Prof. Elisabetta Iossa
Office hours: to be agreed by email
Elisabetta Iossa is Professor of Economics at the University of Rome ‘Tor Vergata’, Research Fellow of the Center for Economic Policy Research (CEPR) in London, and IEFE-Bocconi. She studied in Napoli, University of York and Universitè Libre de Bruxelles, and worked in London at Brunel University for ten years. Her main research interests are in the provision of public services, public procurement and public-private partnerships. On these topics, she has advised many international institutions such as Competition Commission, Financial Service Authority, Office of Fair Trading, International Fund for Agricultural Development and World Bank. Her main publications and further details are available on https://sites.google.com/site/profelisabettaiossa/
Prof. Paolo Buccirossi
Office hours: to be agreed by email
Paolo Buccirossi is the Director and founder of Lear. Paolo has been working in the field of competition policy since 1994. After five years spent as an economic advisor at the Italian Competition Authority, Paolo set up Lear in 1999. Since then he has advised private clients and public institutions on a wide range of competition issues, including cartels, abuse of dominance, vertical agreements and mergers in a variety of industries, before the European Commission and several national competition authorities. His main publications and further details are available on http://www.learlab.com/our-people/paolo-buccirossi-lear/
Teaching Assistant: 'alessio trabucco' <firstname.lastname@example.org>
The course focuses on three main topics: the law and economics of procurement of antitrust policy and public procurement, in particular Public Private Partnerships
All the topics will be studied from both a theoretical perspective and an applied one. Microeconomic theory models will be used to explain incentives of firms and politicians. Case studies will allow to understand real world applications.
By the end of the course, students will have acquired an understanding of the main law and economics issues in competition policy and the delegation of public services to the private sector. Students will then be able to critically assess an antitrust case and to discuss the potential benefit and cost of delegating the provision of a public service to a private firm through public private partnerships.
Selected students interested in these topics will be offered the possibility to undertake a stage (“tirocinio curriculare”) at Proxenter, the Center of Research in Procurement and Supply Chain (www.proxenter.it) and at Lear (www.learlab.com).
At the end of the Course student should:
- be able to understand the logical approach of game theory to study collusive practices among firms in static and dynamic contexts
- be able to use incentive theory tools to study the optimal design and implementation of public private partnerships.
- be able to apply game theory tools to understand the determinants and effects of corruption and the logic behind the economic theory on the fight against corruption
- be able to make judgement on the contribution to the study of corruption of some articles published in economics journals.
The course comprises front lectures and group discussions, including public debates. The assessment method for first “appello” (December and Jan/Feb) combines a written exam (60% weight) and one group project in Buccirossi's part (20% weight) and one group project in Iossa's part (20% weight) - Deadline second assignment: 10 December 2020 - midnight.
For subsequent “appello” students will be evaluated on the exam only with 100% weight.
- Antitrust law (Buccirossi)
- Introduction and objectives of law enforcement agencies
- Anticompetitive agreements
Other horizontal agreements
- Abuse of dominance
- The relationship between market power and efficiency
Market power and allocative efficiency
Market power and productive efficiency
Market power and dynamic efficiency
- Theories of harm in antitrust cases
Softening competition (unilateral effects)
- Sanction policy, leniency programs and action for damages
- Ch. 1, pp. 17-38;
- Ch. 2, pp. 39-58 – but not sec. 2.3.5
- Ch. 4, pp. 137-166
- Ch. 6, sec. 220.127.116.11 and pp. 362-377
Bailey et al. (2010)
Lear (2006), only chapter 2
Buccirossi and Spagnolo (2007)
Website to be consulted
DG Competition (http://ec.europa.eu/competition/index_en.html)
- Procurement Contracting Strategies
Albano et. Al (2006)
- Public Procurement and Public Private Partnerships (Iossa)
- In house vs Outsourcing (traditional procurement): Hart Shleifer and Vishny (1997)
- Main characteristics of PPPs: Iossa and Saussier (2018)
- PPPs vs traditional procurement: Bennett & Iossa (2006)
- Risk allocation in PPPs: Iossa & Martimort (2015)
- Case studies: London Underground; Prisons
Bennett & Iossa (2006)
Hart Shleifer and Vishney (1997)
Iossa & Martimort (2015)
Iossa and Saussier (2018)
- Tariff Regulation of Public Services
- Price cap
- Rate of returns Regulation
- The Economics of Corruption (Iossa)
- How to measure corruption
- The determinants and the effects of corruption
- Strategies to fight corruption
- Legalizing Bribes
- Bandiera, Prat and Valletti (2009),
- Becker, GS., and GJ. Stigler (1974)
- Dufwenberg, M. and G. Spagnolo (2015),
- Fisman, R. and E. Miguel (2007)
- Olken, B. (2009).
- Olken, B. and R. Pande (2012)
- Svensson, J. (2005)
Seminars by Benedetta Mina:
How to build an Economic and Financial Plan in Public Private Partnerships
- Albano, GL. Calzolari, G. Dini, F., Iossa, E, Spagnolo G. (2006) “Procurement Contracting Strategies”. Handbook of Procurement, Capitolo 4, N. Dimitri, G. Piga, and G. Spagnolo, eds., Cambridge University Press. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=908220
- Bailey, E. M., G. K. Leonard, G. S. Olley, and L. Wu, Merger Screens: Market Share-Based Approaches Versus “Upward Pricing Pressure”, The Antitrust Source, February 2010.
- Bandiera, Prat and Valletti (2009), Active and Passive Waste in Government Spending: Evidence from a Policy Experiment, American Economic review, 99: 1278-1308
- Becker, GS., and GJ. Stigler (1974), Law enforcement, malfeasance, and compensation of enforcers, Journal of Legal Studies, Vol. 3, No 1, pp 1.18.
- Bennett, J. Iossa, E. (2006) “Building and Managing Facilities for Public Services”. The Journal of Public Economics, vol. 90 (10-11), pp. 2143-2160.
- Buccirossi P. and G. Spagnolo, Optimal Fines in the Era of Whistleblowers. Should Price Fixers still Go to Prison?, V. Goshal and J. Stennek (Eds.) The Political Economy of Antitrust, Amsterdam: Elsevier, 2007.
- Dufwenberg Martin and Giancarlo Spagnolo (2015), Volume53, Issue2, pp: 836-853.
- Fisman, R. and E. Miguel (2007), Corruption, Norms and Legal Enforcement: Evidence from Diplomatic Parking Tickets, Journal of Political Economy, 115, 6, pp. 1020-048.
- Hart, Oliver, Shleifer, Andrei and Vishny, Robert W. (1997), `The proper scope of government: theory and an application to prisons,' Quarterly Journal of Economics, 112: 1119-58.
- Iossa E., Martimort, D. (2015)_ “The Simple Micro-economics of Public Private Partnerships”. Journal of Public Economic Theory. 17 1: Pages 4–48.
- Iossa E., S. Saussier (2018) “Public Private Partnerships In Europe For Building And Managing Public Infrastructures: An Economic Perspective. Annals of Public and Coperative Economics. Vol. 89, (1), pp: 25-48
- Lear, The cost of inappropriate interventions/non interventions under Article 82, A report prepared for the Office of Fair Trading, 2006, only chapter 2, available at http://www.learlab.com/publication/the-cost-of-inappropriate-interventionsnon-interventions-under-article-82/
- Motta M., Competition Policy. Theory and Practice, 2004 Cambridge, Cambridge Univ. Press.
- Olken, B. (2009). Corruption perceptions vs. corruption reality, Journal of Public Economics, Vol. 93, pp 950.64.
- Olken, B. and R. Pande (2012), Corruption in Developing Countries, Annual Review of Economics, 4, 479-509
- Sappington, D. (2000), Price Cap Regulation and Incentives, Handbook of Telecommunication Economics, Ed. Martin Cave, Sumit Majumdar, and Ingo Vogelsang
- Svensson, J. (2005), “Eight Questions About Corruption.” Journal of Economic Perspectives 19 (3): 19-42