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Project

The effect of donating firms to political parties on procurement contract allocations.

In the determination of government policies, it is important that particular groups of citizens cannot unduly influence legislators, legislation and/or the allocation of public funds in their favour. A substantial literature in political economics and political science suggests that firms’ donations or campaign contributions to political parties might be linked to such political favouritism in government decisions. This project innovates to this literature by (1) using a unique and very detailed data set from the Czech Republic and (2) by focusing on the relationship between firms’ political donations and their ability to secure public procurement contracts. It fills four major research gaps by quantifying the causal link between firms’ political donations and competition in public tenders (gap 1), looking for ‘tipping points’ at which donations start to have an effect on procurement contracts (gap 2), studying inter-temporal shifts in procurement contracts induced by legislation changes (gap 3), and the implications of this favoritism to donating firms in terms of public sector efficiency (gap 4). We apply advanced and state-of-the-art identification strategies like difference-in-differences, ‘tipping points’ approach, exploiting bunching and missing mass, and fixed effects panel stochastic frontier models.

Date:1 Jan 2018 →  31 Dec 2021
Keywords:Procurement contract allocations, Donations
Disciplines:Other economics and business, Citizenship, immigration and political inequality, International and comparative politics, Multilevel governance, National politics, Political behaviour, Political organisations and institutions, Political theory and methodology, Public administration, Other political science