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Measuring the Risk of Corruption and Its Price Impact in North Macedonia 2011–2022

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Listed:
  • Fazekas,Mihaly
  • Abdou,Aly
  • Ibrahimi,Klea
  • Tóth,Bence
  • Veljanov,Zdravko

Abstract

Public procurement in North Macedonia amounted to 16 percent of total government expenditure in 2018, or 5 percent of gross domestic product. The country’s public procurement is also vulnerable to corruption risks, which typically push prices up, leading to overspending. To support better budget policies, this paper maps corruption and state capture risks using administrative data on public procurement and examines their impact on prices. The analysis finds that overall corruption risk decreased slightly in 2011–22, with, for example, the single bidding rate remaining around 30 percent. Estimated overpricing at the contracting stage due to corruption risks ranged between 5 and 6 percent of spending throughout the period. The highest savings potentials are presented by lowering single bidding, increasing the use of a simplified open procedure, and advertising tendering opportunities longer. Network analysis of contracting relationships reveals that the 2017 change in government weakened the centrality of high corruption risk groups of organizations, leading to an overall higher integrity core.

Suggested Citation

  • Fazekas,Mihaly & Abdou,Aly & Ibrahimi,Klea & Tóth,Bence & Veljanov,Zdravko, 2024. "Measuring the Risk of Corruption and Its Price Impact in North Macedonia 2011–2022," Policy Research Working Paper Series 11007, The World Bank.
    • Handle: RePEc:wbk:wbrwps:11007
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    References listed on IDEAS

    as
    1. Ján Palguta & Filip Pertold, 2017. "Manipulation of Procurement Contracts: Evidence from the Introduction of Discretionary Thresholds," American Economic Journal: Economic Policy, American Economic Association, vol. 9(2), pages 293-315, May.
    2. Fazekas,Mihaly & Poltoratskaia,Viktoriia & Tóth,Bence, 2023. "Corruption Risks and State Capture in Bulgarian Public Procurement," Policy Research Working Paper Series 10444, The World Bank.
    3. Fazekas, Mihály & Kocsis, Gábor, 2020. "Uncovering High-Level Corruption: Cross-National Objective Corruption Risk Indicators Using Public Procurement Data," British Journal of Political Science, Cambridge University Press, vol. 50(1), pages 155-164, January.
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