Corruption in the Times of Pandemia
Authors
Gallego, Jorge
Prem, Mounu
Vargas, Juan F.
Editor
Publication date
2020-05-15
Document language
eng
Publisher
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Journal ISSN
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Abstract
The public health crisis caused by the COVID-19 pandemic, coupled with the subsequent economic emergency and social turmoil, has pushed governments to substantially and swiftly increase spending. Because of the pressing nature of the crisis, public procurement rules and procedures have been relaxed in many places in order to expedite transactions. However, this may also create opportunities for corruption. Using contract-level information on public spending from Colombia's e-procurement platform, and a difference-in-differences identification strategy, we find that municipalities classified by a machine learning algorithm as traditionally more prone to corruption react to the pandemic-led spending surge by using a larger proportion of discretionary non-competitive contracts and increasing their average value. This is especially so in the case of contracts to procure crisis-related goods and services. Our evidence suggests that large negative shocks that require fast and massive spending may increase corruption, thus at least partially offsetting the mitigating effects of this fiscal instrument.
Description
Códigos JEL
H57 - Procurement, D73 - Bureaucracy; Administrative Processes in Public Organizations; Corruption, I18 - Government Policy; Regulation; Public Health, H75 - State and Local Government: Health, Education, Welfare , Public Pensions
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Keywords
Corruption, COVID-19, Public procurement, Machine learning
