Political donations, public procurement and government efficiency

Vítězslav Titl, Kristof De Witte and Benny Geys

No 7591, CESifo Working Paper Series from CESifo

Abstract: Firms’ political donations can induce distortions in the allocation of public procurement contracts. In this article, we employ an advanced non-parametric efficiency model to study the public sector (cost) efficiency implications of such distortions. Using a unique dataset covering the Czech regions over the 2007-2014 period, we find that the efficiency of public good provision is lower when a larger share of public procurement contracts is awarded to firms donating to the party in power (‘party donors’). We link this efficiency difference to two underlying mechanisms: i.e. shifts in procurement contract allocations from firms with previous procurement experience to party donors, and the use of less restrictive allocation procedures that benefit party donors.

Keywords: political connections; non-parametric efficiency analysis; benefit-of-the-doubt (search for similar items in EconPapers)
JEL-codes: C23 D72 H57 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-cta, nep-eff, nep-eur, nep-pol, nep-reg and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Political donations, public procurement and government efficiency (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7591

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