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Political corruption, public procurement, and budget composition: Theory and evidence from OECD countries

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  • Hessami, Zohal

Abstract

This paper examines the relation between political corruption and the composition of public spending. A rent-seeking model is used to describe political rent creation through the composition of public spending. Political corruption is indicated by empirical results for 29 OECD countries for the period 1996–2009: allocation of public spending to expenditure categories characterized by high-technology goods supplied by non-competitive industries varies positively with the Corruption Perceptions Index (CPI) provided by Transparency International. Previous literature on corruption in government has focused on low-income countries. The results of this study suggest that political corruption is also an issue in OECD countries.

Suggested Citation

  • Hessami, Zohal, 2014. "Political corruption, public procurement, and budget composition: Theory and evidence from OECD countries," European Journal of Political Economy, Elsevier, vol. 34(C), pages 372-389.
  • Handle: RePEc:eee:poleco:v:34:y:2014:i:c:p:372-389
    DOI: 10.1016/j.ejpoleco.2014.02.005
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    More about this item

    Keywords

    Corruption; Rent seeking; Rent creation; Public procurement; Budget composition;

    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
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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