Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/198951
Authors: 
Titl, Vitezslav
Witte, Kristof De
Geys, Benny
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7591
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Firms’ political donations can induce distortions in the allocation of public procurement contracts. In this article, we employ an advanced non-parametric efficiency model to study the public sector (cost) efficiency implications of such distortions. Using a unique dataset covering the Czech regions over the 2007-2014 period, we find that the efficiency of public good provision is lower when a larger share of public procurement contracts is awarded to firms donating to the party in power (‘party donors’). We link this efficiency difference to two underlying mechanisms: i.e. shifts in procurement contract allocations from firms with previous procurement experience to party donors, and the use of less restrictive allocation procedures that benefit party donors.
Subjects: 
political connections
non-parametric efficiency analysis
benefit-of-the-doubt
JEL: 
H57
D72
C23
Document Type: 
Working Paper

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