Political connections and misallocation of procurement contracts: evidence from Ecuador

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dc.contributor.authorBrugués, F.
dc.contributor.authorBrugués, J.
dc.contributor.authorGiambra, S.
dc.coverage.spatialAmérica Latina y el Caribees_ES
dc.date.accessioned2019-02-25T20:47:03Z
dc.date.available2019-02-25T20:47:03Z
dc.date.issued2018-12-2
dc.description.tableofcontentsThis paper uses detailed ownership information of private firms in Ecuador and the identity of bureaucrats to document the effects of political connections on firm size and the allocation of government contracts. Reduced-form estimates show a significant positive effect of political connection on sales, assets, debt, and costs. Using contract-level data, we find that politically connected firms enjoy higher probability of winning discretionary contracts and charge higher prices for homogeneous goods and services than unconnected firms. Back-of-the-envelope calculations indicate a political connection premium of 475 million USD per year in overpricing. Further analysis from production function estimates suggest that politically connected firms are less efficient than unconnected ones. This translates into a 1.5 to 3.5 percent excess cost of provision.es_ES
dc.identifier.citationBrugués, F., Brugués, J., & Giambra, S. (2018, December 2). Political connections and misallocation of procurement contracts: evidence from Ecuador. Caracas: CAF. Retrieved from https://scioteca.caf.com/handle/123456789/1394en_GB
dc.identifier.urihttps://scioteca.caf.com/handle/123456789/1394
dc.language.isoenes_ES
dc.publisherCAFes_ES
dc.publisher.cityCaracases_ES
dc.subjectEconomíaes_ES
dc.subjectInvestigación socioeconómicaes_ES
dc.titlePolitical connections and misallocation of procurement contracts: evidence from Ecuadores_ES
dc.typeworkingPaperes_ES

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