Social capital predicts corruption risk in towns

Wachs, J., Yasseri, T., Lengyel, B., Kertész, J. (2019). Social capital predicts corruption risk in towns. Royal Society Open Science 6: 182103. http://dx.doi.org/10.1098/rsos.182103

Corruption is a social plague: gains accrue to small groups, while its costs are borne by everyone. Significant variation in its level between and within countries suggests a relationship between social structure and the prevalence of corruption, yet, large-scale empirical studies thereof have been missing due to lack of data. In this paper, we relate the structural characteristics of social capital of settlements with corruption in their local governments. Using datasets from Hungary, we quantify corruption risk …

Read More

Political Competition and Public Procurement Outcomes

Broms, R., Dahlström, C., & Fazekas, M. (2019). Political Competition and Public Procurement Outcomes. Comparative Political Studies. https://doi.org/10.1177/0010414019830723

This article asks if low political competition is associated with more restricted public procurement processes. Using unique Swedish municipal data from 2009 to 2015, it demonstrates that when one party dominates local politics, noncompetitive outcomes from public procurement processes are more common. What is most striking is that the risk of receiving only one bid, on what is intended to be an open and competitive tender, considerably increases with long-standing one-party rule. The article contributes to a significant body of work on …

Read More

Big data in public procurement – Colloquium

Mihaly Fazekas & Stéphane Saussier: Chapter 3. Big data in public procurement. Colloquium. In: Law and Economics of Public Procurement Reforms (ed: Gustavo Piga and Tunde Tatrai), Ruthledge. 2018. https://www.routledge.com/Law-and-Economics-of-Public-Procurement-Reforms/Piga-Tatrai/p/book/9781138296480

Summary of the article

This chapter exposes the enormous opportunities presented by the emergence of Big Data in public procurement and the lack of investment and effort for exploiting these opportunities. Big Data in public procurement holds the promise of fundamentally transforming how procurement performance is understood and it can provide a vastly superior guide to effective policy decisions and implementation compared to our current knowledge. However, Big Data implies …

Read More

Uncovering High-Level Corruption: Cross-National Corruption Proxies Using Government Contracting Data

Fazekas, M and Kocsis, G (2015). Uncovering High-Level Corruption: Cross-National Corruption Proxies Using Government Contracting Data. British Journal of Poltical Science. Published online: 24 August 2017. DOI: https://doi.org/10.1017/S0007123417000461

Measuring high-level corruption and government favouritism has been the object of extensive scholarly and policy interest with relatively little progress in the last decade. In order to address the lack of reliable indicators, this article develops two objective proxy measures of high-level corruption in public procurement: single bidding in competitive markets and a composite score of tendering ‘red flags’. Using publicly available official electronic records of over 2.8 million government contracts in …

Read More

Red tape, bribery and government favouritism: evidence from Europe

Mihály Fazekas: Red tape, bribery and government favouritism: evidence from Europe. Crime, Law and Social Change (2017). URL: https://link.springer.com/article/10.1007/s10611-017-9694-2

Red tape has long been identified as a major cause of corruption, hence deregulation was advocated as an effective anticorruption tool, an advice which many country followed. However, we lack robust systematic evidence on whether deregulation actually lowers corruption. This is partially due to the difficulty of defining what is good regulation, but also to the lack of theoretical clarity about which type of corruption regulations impact on and to the deficient measurement of different types of corruption. In order to …

Read More

Infrastructure for Whom? Corruption Risks in Infrastructure Provision Across Europe

Mihály Fazekas, Bence Tóth: Infrastructure for Whom? Corruption Risks in Infrastructure Provision Across Europe. In: The Governance of Infrastructure. Ed.: Wegrich K, Kostka G, Hammerschmid G. Hertie School of Governance, 9 March 2017. URL: https://global.oup.com/academic/product/the-governance-of-infrastructure-9780198787310?cc=gb&lang=en&#

Infrastructure provision from roads to sanitation involves large amounts of public funds in highly complex projects comprehensible only to a few. Hence, it is hardly a surprise that all across Europe, but especially in high corruption risk countries, it is a primary target of corrupt elites. This is amply evidenced by countless scandals and trials, perception surveys and increasingly ‘objective’ data on corruption risks. Central- …

Read More

Careers, Connections, and Corruption Risks: Investigating the Impact of Bureaucratic Meritocracy on Public Procurement Processes

Nicholas Charron, Carl Dahlström, Viktor Lapuente, Mihály Fazekas (2017). Careers, Connections, and Corruption Risks: Investigating the Impact of Bureaucratic Meritocracy on Public Procurement Processes. The Journal of Politics, Vol. 79, No. 1, January 2017. URL: http://www.jstor.org/stable/10.5699/slaveasteurorev2.95.issue-1

This article emphasizes the important interplay between politics and bureaucracy. It suggests that corruption risks are lower when bureaucrats’ careers do not depend on political connections but on their peers. We test this hypothesis with a novel measure of career incentives in the public sector—using a survey of more than 18,000 public sector employees in 212 European regions—and a new objective corruption risk measure …

Read More

Breaking the cycle? How (not) to use political finance regulations to counter public procurement corruption

Fazekas, M and Cingolani, L (2017). Breaking the cycle? How (not) to use political finance regulations to counter public procurement corruption. In: The Slavonic and East European Review, Vol. 95, No. 1, January 2017. URL: http://www.jstor.org/stable/10.5699/slaveasteurorev2.95.issue-1

There are widespread perceptions and countless documented cases of tight-knit networks of politicians and businessmen colluding for allocating public procurement contracts in return for political party donations. In the absence of systematic evidence, neither the magnitude of the problem nor the effectiveness of policies curbing such corruption is well-understood. In order to advance our understanding of these phenomena, this paper tests whether political financing …

Read More

From Corruption to State Capture. A New Analytical Framework with Empirical Applications from Hungary

Fazekas, M. – Tóth, I. J. (2016): From Corruption to State Capture. A New Analytical Framework with Empirical Applications from Hungary. Political Research Quarterly, published online before print on March 24, 2016 

http://prq.sagepub.com/content/early/2016/03/18/1065912916639137.abstract

State capture and corruption are widespread phenomena across the globe, but their empirical study still lacks sufficient analytical tools. This paper develops a new conceptual and analytical framework for gauging state capture based on microlevel contractual networks in public procurement. To this end, it establishes a novel measure of corruption risk in government contracting focusing on the behavior of individual organizations. Then, it identifies clusters of high-corruption-risk …

Read More

The Political Economy of Grand Corruption in Public Procurement in the Construction Sector of Hungary

Fazekas, M. – Lukács, P. A. – Tóth, I. J.: The Political Economy of Grand Corruption in Public Procurement in the Construction Sector of Hungary. In: Alina Mungiu-Pippidi (ed.): Government Favouritism in Europe. The Anticorruption Report Vol. 3., Barbara Budrich Publishers. Opladen – Berlin – Toronto. 2015. pp. 53-68.

Bidding companies linked to political officeholders are more likely to win in procurement tenders overall in Hungary. The share of companies that are openly connected politically winning public procurement tenders in 2005-2012 was between 5% and 31% depending on how narrowly connections are defined. This significant association is stronger in the …

Read More