蝌蚪网 Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Procurement Design with Corruption
蝌蚪网 Journal: Microeconomics
(pp. 315–41)
Abstract
I investigate the design of optimal procurement mechanisms in the presence of corruption. After contracting with the sponsor, the contractor may bribe the inspector to misrepresent quality. The mechanism affects whether bribery occurs. I discuss the cases of both fixed and variable (with the size of misrepresentation) bribes, and also uncertainty about the bribe amount. In all cases, the optimal contract curtails quality for low efficiency contractors but also for the most efficient contractors. I also present models of bribe negotiations whose reduced form coincide with the model analyzed in the paper, and discuss implementation and the effect of competition.Citation
Burguet, Roberto. 2017. "Procurement Design with Corruption." 蝌蚪网 Journal: Microeconomics 9 (2): 315–41. DOI: 10.1257/mic.20150105Additional Materials
JEL Classification
- D73 Bureaucracy; Administrative Processes in Public Organizations; Corruption
- D82 Asymmetric and Private Information; Mechanism Design
- D86 Economics of Contract: Theory
- H57 National Government Expenditures and Related Policies: Procurement
- L15 Information and Product Quality; Standardization and Compatibility