A Comprehensive Review of Objective Corruption Proxies in Public Procurement: Risky Actors, Transactions, and Vehicles of Rent Extraction

Abstract

This paper can provide a comprehensive review of quantitative corruption proxies, conceptualise how different indicators capture different aspects of corruption, and identify gaps in the measurement landscape. Institutionalised, well-established corruption in government contracting aims to bypass fair and open competition in order to allocate contracts to companies belonging to the corrupt group. This requires at least i) corrupt transactions allowing for rent generation, ii) particularistic relations underpinning collective action of corrupt groups; iii) organisations enabling rent allocation (public organisations); and iv) organisations extracting corrupt rents (private companies). These four requirements of corrupt contracting serve as a framework for the review. We find that there is a surprisingly wide array of indicators validated in particular contexts, leaving generalisability unclear. It is also suggested that the academic literature has largely been preoccupied with one or the other type of corruption proxies such as personal connections without recognising their complementarities. Given the clandestine and often complex character of corrupt deals, a comprehensive measurement approach is advocated where each indicator sheds light on different aspects of the same corrupt phenomena.

Keywords: Corruption, particularism, public procurement, measurement, objective indicators, Big Data

JEL Classification: D72, D73, H57