Corruption and the Management of Public Works in Italy

Corruption in Italian public works construction has been persistent and widespread for many decades. Using a novel measure of corruption, we document the range of corruption affecting public works across Italian regions. We argue that the nature and extent of corruption characterizing Italian regions in the postwar era could not have occurred except as part of a larger pattern of nationally-orchestrated political corruption. We present separate evidence of the spread and incidence of political corruption and show that it is significantly associated with corruption in public works construction. Finally, we attempt to assess whether corruption in Italy declined following extensive judicial investigations in the first half of the 1990s, after which new legislation aimed at cleaning up public contracting was adopted.