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Political Contributions and Public Procurement: Evidence from Lithuania

Working paper n°: 100

Unit: Welfare State and Taxation,Politics and Institutions

Author(s): Audinga Baltrunaite

Year: 2017

This paper studies whether firms trade political contributions for public procurement contracts. Combining data on Lithuanian government tenders, corporate donors and firm characteristics, I examine how a ban on corporate contributions affects the awarding of procurement contracts to companies that donated in the past. Consistent with political favoritism, donors' probability of winning falls by five percentage points as compared to that of non-donor firms after the ban. Evidence on bidding and victory margins suggests that corporate donors might receive information on competing bids. I assess that tax payers save almost one percent of GDP thanks to the reform.


Audinga Baltrunaite

Bank of Italy

 

 

Language: English

 

The paper may be downloaded here

 

 

 

 

 

 

 

 

 

 

 

 

 

Last updated 27 February 2017 - 20:38:54