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An assessment of the waste effects of corruption on infrastructure provision

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  • Massimo Finocchiaro Castro
  • Calogero Guccio
  • Ilde Rizzo

Abstract

In this paper, we investigate the association between the efficiency of infrastructure provision and the level of corruption, in the province in which the infrastructure takes place, employing a large dataset on Italian public works contracts. We, first, estimate efficiency in public contracts’ execution using a smoothed DEA bootstrap procedure that ensures consistency of our estimates. Then, we evaluate the effects of corruption using a semi-parametric technique that produces a robust inference for an unknown serial correlation between efficiency scores. In order to test the robustness of our results, the parametric stochastic frontier approach has also been employed. The results from both nonparametric and parametric techniques show that greater corruption, in the area where the infrastructure provision is localised, is associated with lower efficiency in public contracts execution. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Massimo Finocchiaro Castro & Calogero Guccio & Ilde Rizzo, 2014. "An assessment of the waste effects of corruption on infrastructure provision," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(4), pages 813-843, August.
    • Handle: RePEc:kap:itaxpf:v:21:y:2014:i:4:p:813-843
    DOI: 10.1007/s10797-014-9312-5
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    More about this item

    Keywords

    Corruption; Infrastructure provision; Non-parametric methods; DEA; SFA; D73; H57; D24;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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