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Policy study on political campaign donations and public procurement in Czechia

A think-tank IDEA of the CERGE-EI (a joint research center of the Charles University and the Czech Academy of Sciences) published our summary on the effects of political donations on the public procurement market in the Czech regions.

Our results show that an additional donation of 1 EUR is linked to additional procurement contracts in the value of 100 EUR in the following year. This may suggest a large misallocation of public funds that account for about 14.4% of Czech GDP. As shown in our recent CESifo Working Paper, this appears to be associated with a lower efficiency of public sector.

Links

The article on political donations and the allocations of public procurement contracts published in EER.

My first academic article (together with Benny Geys) has been published at European Economic Review (https://doi.org/10.1016/j.euroecorev.2018.11.004). A short less technical summary can be found on VoxEU (in English) and Roklen24 (in Czech).

In this article, we study whether and when donating to a political party induces favouritism in the allocation of procurement contracts. We find that firms increasing donationg to the party in power by $1 receive on average contracts in the value of $100 more in the year following the donation. Moreover, we show that contracting authorities tend to engage in various forms of strategic behaviour to favour donating firms such as lowering competition and manipulation around threshold between lower and higher discretion.