Political corruption in the execution of public contracts

Arbeitspapier

This paper presents a novel theory of corruption in public procurement. It considers an agency setting of contract execution where the principal is a politician who can commit to a contract auditing policy. It is found that a benevolent politician, by choosing a sufficiently strict auditing, deters the contracting firm from padding costs, conversely, a selfish politician chooses a relatively lax auditing in order to create an incentive for cost-padding, and engages in corruption with the firm in case of detection. If the cost of auditing is high enough, even a benevolent politician might prefer to allow cost-padding.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: DIW Discussion Papers ; No. 1607

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Bureaucracy; Administrative Processes in Public Organizations; Corruption ; Asymmetric and Private Information; Mechanism Design ; Economics of Regulation
• Thema: Corruption in procurement ; Cost-padding ; Selfish politician ; Endogenous auditing ; Procurement contracts ; Principal-agent model

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Chiappinelli, Olga
• Ereignis: Veröffentlichung
• (wer): Deutsches Institut für Wirtschaftsforschung (DIW)
• (wo): Berlin
• (wann): 2016

Weitere Informationen

• Handle: http://hdl.handle.net/10419/146900
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ