The scope and limits of accounting and judicial courts intervention in inefficient public procurement

Estache, A. and Foucart, R. (2018) The scope and limits of accounting and judicial courts intervention in inefficient public procurement. Journal of Public Economics, 157. pp. 95-106. ISSN 0047-2727

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Abstract

Cost inefficiencies in public procurement tend to come from two sources: corruption (moral hazard) and incompetence (adverse selection). In most countries, audit authorities are responsible for monitoring costs but do not distinguish both sources of inefficiency in their audits. Judicial courts typically rely on these cost audits, but only sanction corruption. In a model of public procurement by politicians, we study how the respective quality of the two courts affects corruption as well as cost efficiency. We find that while better courts have the direct effect of decreasing corruption, they may have a negative indirect effect on the abilities of the pool of politicians, so that the net effect on cost efficiency is ambiguous. © 2017 Elsevier B.V.

Item Type: Journal Article
Journal or Publication Title: Journal of Public Economics
Additional Information: Export Date: 2 September 2019 CODEN: JPBEB Correspondence Address: Foucart, R.; Humboldt UniversityGermany; email: renaud.foucart@gmail.com
Uncontrolled Keywords: /dk/atira/pure/subjectarea/asjc/2000/2002
Subjects:
Departments: Lancaster University Management School > Economics
ID Code: 136487
Deposited By: ep_importer_pure
Deposited On: 02 Sep 2019 14:30
Refereed?: Yes
Published?: Published
Last Modified: 25 Feb 2020 09:04
URI: https://eprints.lancs.ac.uk/id/eprint/136487

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