Discretion and political favoritism: Evidence from two reforms in public procurement
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11220%2F24%3A10486080" target="_blank" >RIV/00216208:11220/24:10486080 - isvavai.cz</a>
Result on the web
<a href="https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=iihHgOsuL5" target="_blank" >https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=iihHgOsuL5</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.1002/soej.12709" target="_blank" >10.1002/soej.12709</a>
Alternative languages
Result language
angličtina
Original language name
Discretion and political favoritism: Evidence from two reforms in public procurement
Original language description
The misuse of bureaucratic discretion in public procurement risks political favoritism and corruption. Discretionary thresholds regulate this, with lenient rules below and strict oversight above these thresholds. We examine the impact of changes in these thresholds in the Czech Republic in 2012 and 2016 on discretion misuse and market competition, using bunching estimators, regression discontinuity, and comprehensive data on construction contracts, political ties, and firm productivity. Our findings show a concentration of contracts just below thresholds, both pre and post-reforms. Reforms reallocating contract values to new thresholds reveal that limiting discretion lowers final contract prices, indicating increased efficiency. However, when discretion increases, final prices are unaffected. Efficiency gains are not seen in contracts awarded to politically connected firms, suggesting that political favoritism hinders market outcome improvements from stricter regulations.
Czech name
—
Czech description
—
Classification
Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
—
OECD FORD branch
50201 - Economic Theory
Result continuities
Project
—
Continuities
I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace
Others
Publication year
2024
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
Southern Economic Journal
ISSN
0038-4038
e-ISSN
2325-8012
Volume of the periodical
2024
Issue of the periodical within the volume
June
Country of publishing house
US - UNITED STATES
Number of pages
54
Pages from-to
—
UT code for WoS article
001241833500001
EID of the result in the Scopus database
2-s2.0-85195604389