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Corruption in procurement and public purchase

  • Auriol, Emmanuelle

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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Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 24 (2006)
Issue (Month): 5 (September)
Pages: 867-885

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Handle: RePEc:eee:indorg:v:24:y:2006:i:5:p:867-885
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  1. HINDRIKS, Jean & KEEN, Michael & MUTHOO, Abhinay, . "Corruption, extortion and evasion," CORE Discussion Papers RP 1671, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Kofman, F. & Lawarree, J., 1990. "Collusion in Hierarchical Agency," Discussion Papers in Economics at the University of Washington 91-01, Department of Economics at the University of Washington.
  3. Konrad, Kai A. & Skaperdas, Stergios, 1997. "Credible threats in extortion," Journal of Economic Behavior & Organization, Elsevier, vol. 33(1), pages 23-39, May.
  4. Hoekman, Bernard, 1998. "Using International Institutions to Improve Public Procurement," World Bank Research Observer, World Bank Group, vol. 13(2), pages 249-69, August.
  5. Domberger, Simon & Hall, Christine & Li, Eric Ah Lik, 1995. "The Determinants of Price and Quality in Competitively Tendered Contracts," Economic Journal, Royal Economic Society, vol. 105(433), pages 1454-70, November.
  6. Tirole, Jean, 1986. "Hierarchies and Bureaucracies: On the Role of Collusion in Organizations," Journal of Law, Economics and Organization, Oxford University Press, vol. 2(2), pages 181-214, Fall.
  7. Auriol, Emmanuelle & Laffont, Jean-Jacques, 1992. "Regulation by Duopoly," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 1(3), pages 507-33, Fall.
  8. Kofman, F. & Lawarree, J., 1991. "A Prisoner's Dilemma Model of Collusion Deterrence," Discussion Papers in Economics at the University of Washington 91-15, Department of Economics at the University of Washington.
  9. Bac, Mehmet, 1996. "Corruption and Supervision Costs in Hierarchies," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 99-118, April.
  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, June.
  11. Lambert-Mogiliansky, Ariane, 1997. "Regulatory blackmail in procurement relationships," CEPREMAP Working Papers (Couverture Orange) 9701, CEPREMAP.
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