Corruption in Procurement: An Analysis of Contracting Modes
International Journal of Applied Economics and Econometrics, 13(2), April-June 2005: 283-292
Posted: 28 Sep 2014
Date Written: June 1, 2005
This research examines corruption in government procurement by studying auctions of incentive contracts. Government officials in our framework are not actively seeking bribes but would be prone to altering behavior when offered bribes. Using a simple linear contract, we study the incentives of private contractors to offer bribes and the incidence of corruption under different contracting modes. Our results show that corruption is likely to decrease as contracts move away from fixed-price formats.
Keywords: corruption, procurement, contracts, auctions
JEL Classification: K42, D44
Suggested Citation: Suggested Citation