Measuring Government Favouritism Objectively The

Authors: Irina Mădălina Doroftei

Publish Date: 2016/06/25

Volume: 22, Issue: 3, Pages: 399-413

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Abstract

Government favouritism in the allocation of public funds raises costs for any society in which corruption prevails Particularistic transactions can be identified in three different situations uncompetitive awards of public contracts when there is only one “competitive” tender when public money is spent on contracts supplied by politically connected firms and a situation of capture in which one private contractor obtains a disproportionate share of contracts issued by some public agency This present research has tested for the relevance of those three types of particularistic transactions that signal government favouritism as they apply to the Romanian construction sector for the period from 20072013 and to do so has made use of original public procurement databases Furthermore it will be proposed here that the “kickback”—a percentage of particularistic awarded values—can be used as a measurement of corruption Even conservatively estimated kickbacks account for much of the cost borne by any society that fails to eradicate corruption For our purposes here amounts of kickbacks at county level have been controlled against criminal convictions for corruption at county level As a result data analysis provides strong evidence that kickbacks based on particularistic allocation of public funds are indeed relevant in the measurement of corruption and the steps used to evaluate kickbacks can be used just as well for other countriesThis article has been produced with the support of the European Unions Seventh Framework Programme for Research –Socioeconomic Sciences and Humanities theme EU Grant Agreement number 290529 The information and views set out in this article are those of the author alone and do not reflect any collective opinion of the ANTICORRP consortium nor do they reflect the official opinion of the European Commission Neither the European Commission nor any person acting on behalf of the European Commission is responsible for the use which might be made of the following information The author would like to thank Dr Alina MungiuPippidi for her guidance Roberto Kukutschka for his help and the two reviewers for their valuable comments

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