Corruption Manual for Beginners: 'Corruption Techniques' in Public Procurement with Examples from Hungary

Fazekas, Mihály; Tóth, István János; King, Lawrence

doi:10.2139/ssrn.2333354

Cited by 12 publications

(20 citation statements)

References 30 publications

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“…Indicators of likely corruption techniques to achieve these outcomes in each phase are also defined, which constitute the inputs for corrupt contract award and completion (see Fazekas, Tóth, et al, 2013b).…”

Section: Measurement Modelmentioning

confidence: 99%

“…This bias makes PP well suited for studying more costly and more high stakes corruption where coverage is close to complete. Although, as removing contracts from the remit of the Public Procurement Law can in itself be part of corrupt strategies there remains some non-random bias in the data (for an estimation of this bias see (Fazekas, Tóth, et al, 2013b) and Figure 6 below).…”

Section: Datamentioning

confidence: 99%

“…These capture key characteristics of the public procurement process from the beginning of the submission phase until the end of delivery. Following from the discussion in (Fazekas, Tóth, et al, 2013b) specific expectations are formulated linking each input to each output (Table 8). Single received bid and single valid bid outcomes are discussed jointly because the theoretical considerations are very similar and the regressions unravel largely the same findings.…”

Section: Indicators Of Corruption Inputsmentioning

confidence: 99%

“…Only non-price evaluation criteria combined with fixed price is most likely complying with certain industry standards such as IT procurement without signalling heightened corruption risks (Fazekas, Tóth, et al, 2013b). Hence, only the two categories with positive coefficient receive non-zero weight in the composite indicator.…”

Section: Third Every Non-open Procedures Type Carries a Higher Corrupmentioning

confidence: 99%

“…Once again, knowing that contracts awarded outside the remit of the Public Procurement Law represent higher corruption risks (for a detailed discussion see Fazekas, Tóth, et al, 2013b), it seems that corruption risks have increased between May 2010 and December 2012. (Audet, 2002;European Commission, 2011b Second, as qualitative evidence points out that removing contracts and procedures from the remit of the Public Procurement Law and hence the public domain is a corruption technique on its own, it is possible that the PP database is a biased sample of all the contracts and procedures relevant for analysing institutionalised grand corruption.…”

Section: Validating the Corruption Risk Indexmentioning

confidence: 99%

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Anatomy of Grand Corruption: A Composite Corruption Risk Index Based on Objective Data

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Section: Measurement Modelmentioning

confidence: 99%

Section: Datamentioning

confidence: 99%

Section: Indicators Of Corruption Inputsmentioning

confidence: 99%

Section: Third Every Non-open Procedures Type Carries a Higher Corrupmentioning

confidence: 99%

Section: Validating the Corruption Risk Indexmentioning

confidence: 99%

See 3 more Smart Citations

Anatomy of Grand Corruption: A Composite Corruption Risk Index Based on Objective Data

2013

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Red tape, bribery and government favouritism: evidence from Europe

Fazekas

2017

Crime Law Soc Change

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Red tape has long been identified as a major cause of corruption, hence deregulation was advocated as an effective anticorruption tool, an advice which many country followed. However, we lack robust systematic evidence on whether deregulation actually lowers corruption. This is partially due to the difficulty of defining what is good regulation, but also to the lack of theoretical clarity about which type of corruption regulations impact on and to the deficient measurement of different types of corruption. In order to address the latter two gaps, we differentiate petty corruption from government favouritism and propose novel measurement of the latter by developing two objective proxy measures of favouritism in public procurement: single bidding in competitive markets and a composite score of tendering 'red flags'. Using publicly available official electronic records of over 2.5 million government contracts in 27 EU member states and two European Economic Area countries in 2009-2014, we directly operationalize a common definition of favouritism: unjustified restriction of access to public contracts to favour a certain bidder. Petty corruption is measured using business surveys while the extent of business regulation is measured by Doing Business expert assessment of precise regulatory costs. Using country-level panel regression analysis, we find that deregulation has a heterogeneous impact on both low and high level corruption. It is largely ineffective in tackling government favouritism, with business start-up deregulation even facilitating such corruption. Whereas deregulating the various channels through which governments and businesses interact (e.g. obtaining construction permits) often decreases the perception of bribery and petty corruption. Policy consequences are profound and point at a more targeted and context-dependent promotion of the deregulation agenda. Full public procurement database is available at

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The extent and cost of corruption in transport infrastructure. New evidence from Europe

Fazekas¹,

Tóth²

2018

Transportation Research Part A: Policy and Practice

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Transport infrastructure provision from roads to waterways involves large amounts of public funds in very complex projects. It is hardly a surprise that all across Europe, but especially in high corruption risk countries, it is a primary target of corrupt elites. This article provides a state-of-the-art review of the literature on the cost of corruption and estimates the level of corruption risks and associated costs in European infrastructure development and maintenance in 2009-2014 using novel data on over 40,000 government contracts. Two forms of corruption costs are investigated in the empirical section: 1) distorting spending structure and project design, and 2) inflating prices. Findings indicate that corruption steers infrastructure spending towards high value as opposed to small value investment projects. It also inflates prices by 30-35% on average with largest excesses in high corruption risk regions. Contrary to perceptions, corruption risks in infrastructure are decoupled to a considerable extent from the national corruption environment. Source data and risk scores are made downloadable at digiwhist.eu/resources/data.

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Corruption Manual for Beginners: 'Corruption Techniques' in Public Procurement with Examples from Hungary

Abstract: Tárgyszavak: közbeszerzés, nagy korrupció, korrupciós technikák, korrupciós indikátorok, kvantitatív elemzés JEL kód: C81, D72, D73, H57

Cited by 12 publications

References 30 publications

Anatomy of Grand Corruption: A Composite Corruption Risk Index Based on Objective Data

Anatomy of Grand Corruption: A Composite Corruption Risk Index Based on Objective Data

Red tape, bribery and government favouritism: evidence from Europe

The extent and cost of corruption in transport infrastructure. New evidence from Europe

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