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Assessing Vulnerabilities to Corruption in Public Procurement and Their Price Impact

Author

Listed:
  • Aly Abdou
  • Olivier Basdevant
  • Elizabeth David-Barrett
  • Mihaly Fazekas

Abstract

Public procurement can be highly vulnerable to corruption. This paper outlines a methodology and results in assessing corruption risks in public procurement and their impact on relative prices, using large databases on government contracts and tenders. Our primary contribution is to analyze how price differential in public procurement contracts can be explained by corruption risk factor (aggregated in a synthetic corruption risk index). While there are intrinsic limitations to our study (price differentials can come from structural reasons, such as a limited number of potential suppliers) it still provides a guiding tool to assess where corruption risks would have the biggest budgetary impact. Such analysis helps inform mitigating policies owing to the granular data used.

Suggested Citation

  • Aly Abdou & Olivier Basdevant & Elizabeth David-Barrett & Mihaly Fazekas, 2022. "Assessing Vulnerabilities to Corruption in Public Procurement and Their Price Impact," IMF Working Papers 2022/094, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2022/094
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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=518197
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    Cited by:

    1. István János Tóth & Miklós Hajdu, 2023. "Corruption Risk and Education at Regional Level," CERS-IE WORKING PAPERS 2335, Institute of Economics, Centre for Economic and Regional Studies.

    More about this item

    Keywords

    public procurement; corruption; corruption risks; procurement cost; price differential; corruption risk; price impact; procurement contract; data collection methodology; Global;
    All these keywords.

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