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Corruption in delegated public procurement auctions

Krishnendu Dastidar () and Diganta Mukherjee

European Journal of Political Economy, 2014, vol. 35, issue C, 122-127

Abstract: In this paper we theoretically analyse effects of corruption in public procurements within a scoring-auction framework. A corrupt politician, who acts on behalf of the public sector, receives a kickback from the winning bidder. The politician selects the scoring rule. The paper shows that such corruption always leads to lower quality and lower price. Given a level of corruption, a higher bargaining power of the politician in extracting bribes does not affect the quality but leads to higher price.

Keywords: Public procurement; Corruption; Scoring auction (search for similar items in EconPapers)
JEL-codes: D44 H57 L13 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1016/j.ejpoleco.2014.05.003

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Handle: RePEc:eee:poleco:v:35:y:2014:i:c:p:122-127