Public institutions are structurally easy targets for collusive market cartels

Evidence

A group of six or seven commissionari—those said to be of “great respect”—apparently collude over the contracts with institutions such as schools, hospitals, military barracks, and nursing homes. Each commissionario supplies specific institutions, and the problem of competition is eliminated radically: by common agreement only one commissionario bids for each contract. In comparison to private customers, public institutions are fewer in number and take out longer-term contracts; in addition, they buy fixed quantities and are generally less demanding about quality, less concerned about price, and corruptible. In short, they are easy to monopolize and share. — Diego Gambetta, The Sicilian Mafia The Business of…, 561

Categorization

• XREF: State as a uniquely exploitable buyer connects to the broader theme of state failure enabling private protection; the fixed-quantity, corruptible-buyer profile mirrors the state’s role in other protection markets.
• SEED: Article angle: why governments are consistently the weakest customer in markets — few buyers, long contracts, corruptible procurement — and what that implies for anti-collusion policy.