Abstract
The aim of this paper is to provide an empirical test of the impact of competition in procurement to reduce the effects of ‘environmental’ corruption. For this purpose, the paper examines whether competition is able to constrain the waste effects of corruption in the area where the public work is localised. We develop the results provided by Finocchiaro Castro et al., (2014) on the effects of corruption on infrastructure provision assessing whether more competition matters in constraining ’environmental’ corruption. For this purpose, a two-stage analysis is carried out. In the first stage, a non-parametric approach (Data Envelopment Analysis - DEA) investigates the relative efficiency of each public work execution; in the second stage, the determinant factors of the variability of efficiency scores are investigated. Our results, in line with Finocchiaro Castro et al., (2014) show that greater corruption, in the area where the infrastructure is localised, is associated with lower efficiency in public contracts execution; moreover, we also show that increasing competition does not mitigate the negative effects of ‘environmental’ corruption on public works executions.
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