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The Value of Revolving Doors in Public Procurement

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  • Barbosa, Klenio
  • Straub, Stéphane

Abstract

This paper investigates the impact of revolving door movements on public procurement outcomes. We combine 10 years of procurement contracts in the Brazilian health sector with a comprehensive employer-employee dataset tracing individual job experience and characteristics to identify how movements of individuals between public administrations and private providers affect the total number of contracts, quantities, and acquisition prices. We analyze career changes in both directions between public bodies and private suppliers, and provide evidence of significant direct effects, spillovers to other firms and administrations, impact on workers’ remuneration, and on aggregate spending. We uncover positive and negative effects of revolving door on the efficiency of procurement, which are, respectively, consistent with reward for high-skill workers’ signaling competence and collusive behavior. In particular, we find that effects of administration-to-supplier connections are beneficial to public bodies, while effects of supplier-to-administration ones are detrimental. Their aggregate impacts on spending are, respectively, –3% and +2% of total procurement outlays. These results point to specific and unexpected policy implications related to the tolerance of revolving door practices.

Suggested Citation

  • Barbosa, Klenio & Straub, Stéphane, 2017. "The Value of Revolving Doors in Public Procurement," TSE Working Papers 17-873, Toulouse School of Economics (TSE).
  • Handle: RePEc:tse:wpaper:32283
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    References listed on IDEAS

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    More about this item

    Keywords

    Procurement; Revolving door; Public Officials Career Path; Personnel Economics;

    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
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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