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Bureaucratic discretion and contracting outcomes

Matthew Boland and David Godsell

Accounting, Organizations and Society, 2021, vol. 88, issue C

Abstract: We find that federal bureaucrats award more, larger, and less risky contracts to politically connected firms when they have greater discretion over contracting outcomes. Using a sample of 4.3 million federal government contract actions obligating $2.47 trillion between 2000 and 2015, we show that this result varies predictably across contract and agency characteristics, over time, and in placebo tests, and is robust to a comprehensive fixed effect structure and seven alternate measures of political connectedness. Our evidence illustrates the overlooked role of the bureaucrat in facilitating political bias in federal contracting outcomes.

Keywords: Government spending; Monitoring and control; Corporate political activity; Procurement contracts (search for similar items in EconPapers)
JEL-codes: D72 D73 G38 H5 M48 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.aos.2020.101173

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