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Bureaucratic discretion and contracting outcomes

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  • Boland, Matthew
  • Godsell, David

Abstract

We find that federal bureaucrats award more, larger, and less risky contracts to politically connected firms when they have greater discretion over contracting outcomes. Using a sample of 4.3 million federal government contract actions obligating $2.47 trillion between 2000 and 2015, we show that this result varies predictably across contract and agency characteristics, over time, and in placebo tests, and is robust to a comprehensive fixed effect structure and seven alternate measures of political connectedness. Our evidence illustrates the overlooked role of the bureaucrat in facilitating political bias in federal contracting outcomes.

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  • Boland, Matthew & Godsell, David, 2021. "Bureaucratic discretion and contracting outcomes," Accounting, Organizations and Society, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:aosoci:v:88:y:2021:i:c:s036136821830179x
    DOI: 10.1016/j.aos.2020.101173
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    Cited by:

    1. Tukiainen, Janne & Blesse, Sebastian & Bohne, Albrecht & Giuffrida, Leonardo M. & Jääskeläinen, Jan & Luukinen, Ari & Sieppi, Antti, 2021. "What are the priorities of bureaucrats? Evidence from conjoint experiments with procurement officials," ZEW Discussion Papers 21-033, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    Government spending; Monitoring and control; Corporate political activity; Procurement contracts;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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