The Effect of Competition on Corruption: Evidence from Contractors’Internal Records

Aamer Shahid and Stephan Litschig
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Aamer Shahid: National Accountability Bureau of Pakistan
Stephan Litschig: National Graduate Institute for Policy Studies, Tokyo, Japan

No 24-10, GRIPS Discussion Papers from National Graduate Institute for Policy Studies

Abstract: This paper investigates the extent to which competition for public contracts reduces projectlevel rents and bribe payments to public officials. Water supply and sanitation project contractors for the provincial government of Punjab in Pakistan were interviewed on the condition of anonymity and gave access to 237 project-level construction ledgers. Under collusion, contractors pay about 15 percent of the project budget in kickbacks on average. Under competition for the contract, the winning bid and associated available rents go down by about 11 percentage points. Even under competition, public officials take almost 10 percent of the project budget in bribes.

Keywords: Rents; competition; corruption; bribery; public works Higher-Order Approximation (search for similar items in EconPapers)
Pages: 14 pages
Date: 2024-09
New Economics Papers: this item is included in nep-ppm
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Persistent link: https://EconPapers.repec.org/RePEc:ngi:dpaper:24-10

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