Assessing Vulnerabilities to Corruption in Public Procurement and Their Price Impact
IMF Working Papers, May 20, 2022
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Bibliographic details
- Authors: Aly Abdou, Olivier Basdevant, Elizabeth David-Barrett, Mihaly Fazekas
- Published: May 20, 2022
- Series: IMF Working Papers
Overview
- Title: Assessing Vulnerabilities to Corruption in Public Procurement and Their Price Impact
- Authors: Aly Abdou, Olivier Basdevant, Elizabeth David-Barrett, Mihaly Fazekas
- Publication date: May 20, 2022
- Series: Working Paper No. 2022/094
- Issue: 094
- Volume: 2022
- Pages: 31
- ISBN: 9798400207884
- ISSN: 1018-5941
- Publication type: IMF Working Papers
Research focus and primary contribution
- The paper outlines a methodology and results for assessing corruption risks in public procurement and their impact on relative prices using large databases on government contracts and tenders.
- Primary contribution: analyze how price differential in public procurement contracts can be explained by a corruption risk factor aggregated in a synthetic corruption risk index.
Key findings
- Public procurement can be highly vulnerable to corruption.
- Price differentials in public procurement contracts can be associated with corruption risk factors captured in a synthetic corruption risk index.
- The analysis provides a guiding tool to identify where corruption risks would have the biggest budgetary impact by leveraging granular contract- and tender-level data.
Methodology (high-level)
- Uses large databases on government contracts and tenders.
- Aggregates corruption risk factors into a synthetic corruption risk index to explain observed price differentials across procurement contracts.
Limitations noted by the authors
- Intrinsic limitations: price differentials can arise from structural reasons unrelated to corruption, such as a limited number of potential suppliers.
- The results should be interpreted in light of these structural explanations.
Policy implications and use
- The analysis helps inform mitigating policies by indicating where corruption risks have the largest budgetary consequences.
- Granular data on contracts and tenders enables targeted assessment to support policy design for reducing procurement-related corruption and its price impact.
Source: IMF Working Paper No. 2022/094, "Assessing Vulnerabilities to Corruption in Public Procurement and Their Price Impact", May 20, 2022.
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