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 construction sector compared to the rest of public procurement and deteriorated after 2011. The material stakes are very high as constructions make up to 60-80% of the total advertised public procurement spending, mostly funded by EU.

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