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The Effect of Competition on Corruption: Evidence from Contractors’Internal Records

Author

Listed:
  • Aamer Shahid

    (National Accountability Bureau of Pakistan)

  • Stephan Litschig

    (National Graduate Institute for Policy Studies, Tokyo, Japan)

Abstract

This paper investigates the extent to which competition for public contracts reduces projectlevel rents and bribe payments to public officials. Water supply and sanitation project contractors for the provincial government of Punjab in Pakistan were interviewed on the condition of anonymity and gave access to 237 project-level construction ledgers. Under collusion, contractors pay about 15 percent of the project budget in kickbacks on average. Under competition for the contract, the winning bid and associated available rents go down by about 11 percentage points. Even under competition, public officials take almost 10 percent of the project budget in bribes.

Suggested Citation

  • Aamer Shahid & Stephan Litschig, 2024. "The Effect of Competition on Corruption: Evidence from Contractors’Internal Records," GRIPS Discussion Papers 24-10, National Graduate Institute for Policy Studies.
    • Handle: RePEc:ngi:dpaper:24-10
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    File URL: https://grips.repo.nii.ac.jp/record/2000134/files/DP24-10.pdf
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    Keywords

    Rents; competition; corruption; bribery; public works Higher-Order Approximation;
    All these keywords.

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