Decentralization, Procurement Design, and Contract Performance in Public Works: Institutional, Economic, and Managerial Determinants of Cost and Time Outcomes

Abstract

Public works procurement remains one of the most complex and policy-sensitive domains of public sector governance, particularly in contexts characterized by decentralization, heterogeneous institutional capacities, and incomplete contracting environments. Across countries, infrastructure projects frequently experience cost overruns, time delays, renegotiations, and performance inefficiencies, raising fundamental questions about the design of procurement mechanisms, the role of local governments, and the institutional conditions under which public contracts are executed. This research article develops an integrated theoretical and empirical analysis of public works procurement performance by synthesizing insights from political economy, contract theory, institutional economics, and construction management. Drawing strictly on established literature, with particular emphasis on Italian public procurement experiences and comparative evidence from road and infrastructure projects globally, the study examines how decentralization, auction formats, bid screening, contract incompleteness, judicial efficiency, renegotiation incentives, and inflationary pressures interact to shape cost and time outcomes. The article adopts a qualitative-descriptive methodological approach grounded in extensive theoretical elaboration of empirical findings reported in prior studies. Results indicate that decentralized procurement can improve responsiveness and execution speed under favorable institutional conditions, but may also exacerbate inefficiencies when local administrative capacity is weak. Auction design and awarding criteria significantly influence ex post performance, while renegotiation emerges as a structural feature of incomplete public contracts rather than an anomaly. Inflation and macroeconomic volatility further complicate cost control, particularly in long-duration road projects. The discussion highlights the policy trade-offs inherent in procurement reform, the central role of institutional quality, and the need for adaptive governance frameworks capable of balancing flexibility with accountability. The article concludes by outlining future research directions and policy implications for improving public works performance in decentralized systems.