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"Corruption in Procurement : Evidence from Financial Transactions Data" - Mémo n°7 Chaire ETA

Découvrez le 7e numéro des Mémos de la Chaire ETA-Economics of Transparency and Accountability

Corruption in Procurement : Evidence from Financial Transactions Data

PNG - 69.4 ko

Par Maxim Mironov et Ekaterina Zhuravskaya. This paper develops a novel approach to measuring illicit payments of firms to politicians based on objective financial data from Russia. Firms with public procurement revenue substantially increase tunneling around regional elections, whereas neither the tunneling activity of firms without procurement revenue, nor the legitimate financial activity of firms exhibits a pronounced political cycle. We show that the correlation between tunneling around elections and procurement contacts across firms is an indicator of corruption. We use the variation in the strength of this correlation to build a locality-level measure of corruption. Using this measure, we test and reject the "efficient grease" hypothesis by showing that in more corrupt localities procurement contracts are allocated to less productive firms.