• SITE Academic Conference “Fighting Corruption in Developing and Transition Countries”

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    On August 31 and September 1, 2015, I took part in the conference “Fighting Corruption in Developing and Transition Countries” at the Stockholm School of Economics. The program of the conference, organized by the Stockholm Institute of Transition Economics (SITE) and the ASWEDE network, brougt together leading researchers across all fields of economics (and in particular development economics and procurement) contributing to the debate about corruption, its effects, and the optimal tools to fight it. Some pictures of the event can be seen here.

    I presented my work with Klenio Barbosa from Sao Paulo on revolving doors in public procurement:

    This paper empirically investigates the link between public officials’ experience and career path and the public procurement process. Using an unique data set covering more than 3 millions procurement contracts of medical supplies, hospital equipments and pharmaceuticals organized by Brazilian public bodies over 10 years (2000 to 2009), together with a comprehensive data set tracing individual job experience and characteristics of all public and private formal employees in the country since 1998, we identify how career paths of individuals involved as purchase administrators or working for private providers determine procurement outcomes: probability of a firm obtaining a contract, contract value, volume, acquisition price, and awarding procedure (invited bidders, restricted bidders, electronic auction, direct purchase).
    We are particularly looking at so called “revolving door” issues. We match the two datasets above to systematically identify career changes in two directions. Officials may work first for a public body and then join a private supplier. Alternatively, officials may work first for a private supplier before joining a public body. When analyzing contractual outcomes at a given date, we consider both past and future movements, and all related lags.
    We develop a three-tier agency model of procurement à la Laffont-Tirole (1993), in which we embed public officials’ revolving door concerns following Che (1995). We derive from it predictions on our outcomes of interest (contract going to connected firms, prices and quantity), depending on the way the official tries to enhance the probability of post agency employment in the industry. We show that in the basic model, stronger monitoring effort by public officials seeking to signal competence on the job leads to higher quantities and prices for the firms they are targeting, while lenient or collusive behavior in the form of decreased monitoring effort leads to lower quantities and prices. We then decline this model to fit the timing and direction of the revolving door relationships we observe in the data and derive corresponding predictions that we take to the data.
    Relying on such data set, we show, using several types of counterfactuals, that in several instances the movements of procurement officials significantly affect procurement outcomes: volumes delivered, price paid by the government, and probability of getting procurement contracts. Interestingly, we uncover both positive effects and negative effects of revolving door individuals on the efficiency of procurement. We provide an intuitive interpretation of our results according to our theoretical framework, relating them either to potential efficiency gains of allowing movement of workers, or to potential abuses. The results point to specific policy implications related to the tolerance of revolving door practices

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