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The World Bank's procurement competition and the Italian construction industry

Author

Listed:
  • Michele Benvenuti

    (Bank of Italy)

  • Luca Casolaro

    (Banca d'Italia)

  • Tindaro Paganini

    (ICE and World Bank)

  • Umberto Viviani

    (Bank of Italy and Italian Embassy Washington)

Abstract

The World Bank's procurement sector performs yearly operations ranging from $20 to $40 billion, half of which financing civil works. The share of contracts assigned to Italian firms peaked at 4 per cent in 2007-2012 (6 per cent in the civil works sector), significantly improving the level of the previous 2001-2006 period; Italy ranked as the fourth country in overall value. These projects are carried out by a small number of firms, are large in size, situated in relatively close markets (Eastern Europe and Central Asia) and mainly related to transportation. The World Bank's procurement procedures are currently under revision. Both opportunities and risks may arise for Italian firms. Projects will be assessed by looking beyond the initial bid price: quality and life-cycle profitability will be more relevant, representing a potential advantage to Italian firms used to managing large, complex projects. On the other hand, a more widespread use of national procurement procedures could result in a comparative disadvantage for non-local firms.

Suggested Citation

  • Michele Benvenuti & Luca Casolaro & Tindaro Paganini & Umberto Viviani, 2014. "The World Bank's procurement competition and the Italian construction industry," Questioni di Economia e Finanza (Occasional Papers) 249, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_249_14
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2014-0249/QEF_249.pdf
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    More about this item

    Keywords

    World Bank; procurement; civil works; construction;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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