EconPapers    
Economics at your fingertips  
 

The Cost of Favoritism in Public Procurement

Bruno Baránek and Vítězslav Titl

Journal of Law and Economics, 2024, vol. 67, issue 2, 445 - 477

Abstract: Are political connections in public procurement harmful or efficiency gaining for the public sector, and what are the costs of favoritism toward politically connected firms? Exploiting detailed data on firm representatives’ political affiliations in the Czech Republic, we find that favoritism toward politically connected firms increases the price of procurement contracts by 6 percent of the estimated costs, while no gains in terms of quality are generated. Interestingly, these adverse effects of political connections are mitigated by additional oversight from a higher level of the government because they are cofunded by the European Union. On the basis of our estimates, total procurement expenditures increased by .36 percent owing to favoritism.

Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://dx.doi.org/10.1086/727793 (application/pdf)
http://dx.doi.org/10.1086/727793 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jlawec:doi:10.1086/727793

Access Statistics for this article

More articles in Journal of Law and Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division (pubtech@press.uchicago.edu).

 
Page updated 2025-03-22
Handle: RePEc:ucp:jlawec:doi:10.1086/727793