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All you need is political love? Assessing the effects of partisan favouritism in Croatia's public procurement

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  • Grdović Gnip, Ana

Abstract

This paper discusses the political donations - public procurement interplay in Croatia. It rests on a unique and comprehensive hand-collected firm-by-tender micro-level dataset that enables the assessment of partisan favouritism in procuring goods, services and work by the Croatian government in the 2012–2018 period. Main results show that (i) political donations pay off and a ten percent increase in political donations leads to an increase in public procurement revenues of 5.7%; (ii) political disloyalty, i.e. switching donations from centre-right to centre-left parties or vice versa, does not reimburse; (iii) big firms in Croatia are big enough to bid lower prices and/or contract better terms, such that they don't need favouritism in public procurement awards; and (iv) political contributions ex-post election (2016–2018) increase procurement revenues of donating firms by 27%, and firms connected to the losing party exhibit a drop in procurement revenues of more than 12% compared to the ex-ante elections.

Suggested Citation

  • Grdović Gnip, Ana, 2022. "All you need is political love? Assessing the effects of partisan favouritism in Croatia's public procurement," European Journal of Political Economy, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:poleco:v:75:y:2022:i:c:s0176268021001373
    DOI: 10.1016/j.ejpoleco.2021.102170
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    1. Hoekman, Bernard & Onur Taş, Bedri Kamil, 2024. "Discretion and public procurement outcomes in Europe," European Journal of Political Economy, Elsevier, vol. 82(C).

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    More about this item

    Keywords

    Public procurement; Political donation; Political contribution; Croatia; Partisan favouritism;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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