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Corruption in Procurement and Public Purchase

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  • Auriol, E.

Abstract

The paper studies the impact of corruption threat in procurement an dpublic purchases. It explores the consequences of the unobservability of people integrity and considers the problem of both capture and extortion. It shows that extortion is not fight against because it is not harmful to the principal, contrary to capture which is costly. This distinction implies that when corruptibility increases among the population the optimal answer of the organization is to shift from a capture regime to an extortion regime.

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Bibliographic Info

Paper provided by Universite Aix-Marseille III in its series G.R.E.Q.A.M. with number 98a29.

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Length: 22 pages
Date of creation: 1998
Date of revision:
Handle: RePEc:fth:aixmeq:98a29

Contact details of provider:
Postal: G.R.E.Q.A.M., (GROUPE DE RECHERCHE EN ECONOMIE QUANTITATIVE D'AIX MARSEILLE), CENTRE DE VIEILLE CHARITE, 2 RUE DE LA CHARITE, 13002 MARSEILLE.
Phone: 04.91.14.07.70
Fax: 04.91.90.02.27
Email:
Web page: http://www.greqam.fr/
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Keywords: CORRUPTION ; ASYMMETRIC INFORMATION;

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References

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  1. Hindriks, J. & Keen, M. & Muthoo, A., 1996. "Corruption, Extortion and Evasion," Papers, Notre-Dame de la Paix, Sciences Economiques et Sociales 179, Notre-Dame de la Paix, Sciences Economiques et Sociales.
  2. Kofman, Fred & Lawarree, Jacques, 1993. "Collusion in Hierarchical Agency," Econometrica, Econometric Society, Econometric Society, vol. 61(3), pages 629-56, May.
  3. Emmanuelle Auriol, 1996. "Une note sur l'effet d'échantillonnage," Revue économique, Presses de Sciences-Po, vol. 0(5), pages 1179-1201.
  4. Auriol, Emmanuelle & Laffont, Jean-Jacques, 1992. "Regulation by Duopoly," IDEI Working Papers 20, Institut d'Économie Industrielle (IDEI), Toulouse.
  5. Kofman, Fred & Lawarree, Jacques, 1996. "A prisoner's dilemma model of collusion deterrence," Journal of Public Economics, Elsevier, vol. 59(1), pages 117-136, January.
  6. Domberger, Simon & Hall, Christine & Li, Eric Ah Lik, 1995. "The Determinants of Price and Quality in Competitively Tendered Contracts," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 105(433), pages 1454-70, November.
  7. Tirole, Jean, 1986. "Hierarchies and Bureaucracies: On the Role of Collusion in Organizations," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 2(2), pages 181-214, Fall.
  8. Bac, Mehmet, 1996. "Corruption and Supervision Costs in Hierarchies," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 99-118, April.
  9. Lambert-Mogiliansky, Ariane, 1997. "Regulatory blackmail in procurement relationships," CEPREMAP Working Papers (Couverture Orange) 9701, CEPREMAP.
  10. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, December.
  11. Konrad, Kai A. & Skaperdas, Stergios, 1997. "Credible threats in extortion," Journal of Economic Behavior & Organization, Elsevier, vol. 33(1), pages 23-39, May.
  12. Hoekman, Bernard, 1998. "Using International Institutions to Improve Public Procurement," World Bank Research Observer, World Bank Group, World Bank Group, vol. 13(2), pages 249-69, August.
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Citations

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Cited by:
  1. Oriana Bandiera & Andrea Prat & Tommaso Valletti, 2009. "Active and Passive Waste in Government Spending: Evidence from a Policy Experiment," American Economic Review, American Economic Association, vol. 99(4), pages 1278-1308, September.
  2. Long, Ngo Van & Stähler, Frank, 2009. "A contest model of liberalizing government procurements," European Journal of Political Economy, Elsevier, vol. 25(4), pages 479-488, December.
  3. Antonio Estache & A. Iimi, 2008. "Procurement Efficiency for Infrastructure Development and Financial Needs Reassessed," Working Papers ECARES 2008_022, ULB -- Universite Libre de Bruxelles.
  4. Martimort, David & Straub, Stéphane, 2009. "Infrastructure privatization and changes in corruption patterns: The roots of public discontent," Journal of Development Economics, Elsevier, vol. 90(1), pages 69-84, September.
  5. Sean Lewis-Faupel & Yusuf Neggers & Benjamin A. Olken & Rohini Pande, 2014. "Can Electronic Procurement Improve Infrastructure Provision? Evidence From Public Works in India and Indonesia," NBER Working Papers 20344, National Bureau of Economic Research, Inc.
  6. Anna D’Souza & Daniel Kaufmann, 2013. "Who bribes in public contracting and why: worldwide evidence from firms," Economics of Governance, Springer, vol. 14(4), pages 333-367, November.
  7. Auriol, Emmanuelle & Flochel, Thomas & Straub, Stéphane, 2011. "Public Procurement and Rent-Seeking: The Case of Paraguay," CEPR Discussion Papers 8282, C.E.P.R. Discussion Papers.
  8. Charles Kenny, William Savedoff, 2013. "Can Results-Based Payments Reduce Corruption?-Working Paper 345," Working Papers 345, Center for Global Development.
  9. David Martimort & Stephane Straub, 2006. "Privatization and Changes in Corruption Patterns: The Roots of Public Discontent," ESE Discussion Papers 147, Edinburgh School of Economics, University of Edinburgh.
  10. Serena Brianzoni & Raffaella Coppier & Elisabetta Michetti, 2012. "A Growth Model with Corruption in Public Procurement: Equilibria and Policy Implications," Working Papers, Macerata University, Department of Finance and Economic Sciences 68-2012, Macerata University, Department of Finance and Economic Sciences, revised Nov 2012.
  11. Ufere, Nnaoke & Perelli, Sheri & Boland, Richard & Carlsson, Bo, 2012. "Merchants of Corruption: How Entrepreneurs Manufacture and Supply Bribes," World Development, Elsevier, vol. 40(12), pages 2440-2453.

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