Political donations, public procurement and government efficiency

Arbeitspapier

Firms’ political donations can induce distortions in the allocation of public procurement contracts. In this article, we employ an advanced non-parametric efficiency model to study the public sector (cost) efficiency implications of such distortions. Using a unique dataset covering the Czech regions over the 2007-2014 period, we find that the efficiency of public good provision is lower when a larger share of public procurement contracts is awarded to firms donating to the party in power (‘party donors’). We link this efficiency difference to two underlying mechanisms: i.e. shifts in procurement contract allocations from firms with previous procurement experience to party donors, and the use of less restrictive allocation procedures that benefit party donors.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 7591

Classification and Topics

• Classification: Wirtschaft ; National Government Expenditures and Related Policies: Procurement ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
• Subject: political connections ; non-parametric efficiency analysis ; benefit-of-the-doubt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Titl, Vitezslav ; Witte, Kristof De ; Geys, Benny
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/198951
• Last update: 10.03.2025, 11:41 AM CET