COSTS OF CORRUPTION IN PUBLIC ACQUISITION PROCESSES

(BENE) Mihaela Sabau and Gheorghe Florin Bene
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(BENE) Mihaela Sabau: The Ministry of Public Finance
Gheorghe Florin Bene: The Chamber of Tax Consultants

Revista Economica, 2017, vol. 69, issue 3, 112-122

Abstract: Defining corruption is difficult due to the fact that it occurs in many forms and evolves continuously. In addition, the people involved are trying to hide their actions, which make the identification of corruption difficult. Corruption distorts competition and may reduce the quality, sustainability and security of public acquisition projects and at the same time reduces the likelihood that purchased goods and services will genuinely meet public needs. The cost of corruption in public acquisition is measured not only through money lost from public financial resources. The direct costs of corruption derive from the incorrect and non-transparent allocation of public acquisition funds by setting either lower quantities of goods and works, or by overestimating the prices and the downstream tariffs in budget commitments and public spending, by violating of the principle of efficiency and accountability of the use of public funds, acts and economic facts that are in contrast to the real prices and tariffs of the competitive market. Through the mechanisms used to support the private interests of legal entities in their capacity of presumptive public acquisition contractors / adjudicators, corrupt acts of public policy makers, including by exerting political influence on managers and authorizing officers of national or sub-national public authorities contracting parties are likely to increase the indirect costs of corruption in terms of distorting competition and hampering access to the public acquisition market for economic operators.

Keywords: public acquisition; corruption; direct costs; public finances; public resources (search for similar items in EconPapers)
JEL-codes: H41 H42 H57 (search for similar items in EconPapers)
Date: 2017
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