Structuring Public Procurement in Local Governments: The Effect of Centralization, Standardization and Digitalization on Performance

There is broad recognition of the potential contribution of procurement within public administrations at all levels, as efficient and effective management of required inputs has a crucial impact on the achievement of high-level objectives. This is particularly true for local governments, where procurement consumes a substantial part of the budget cost, thus representing a key mechanism to provide value for citizens. Through the analysis of quantitative data collected from municipalities in two different countries (Italy and the USA), the current paper analyzes how specific structural decisions for public procurement (i.e., level of centralization, level of digitalization, level of standardization) are linked to performance. Multiple regression analyses show a positive linkage between the levels of centralization and digitalization and procurement performance, while no evidence is found for what concerns the standardization of the processes. Digitalization is ultimately a potential factor that mitigates the negative effects of decentralization on cost savings. Cluster analysis identifies two types of procurement systems—one more oriented toward cost efficiency and the other more focused on quality. Some antecedents (country, size, and magnitude of spending) affect the procurement design but not the performance.