The scope and limits of accounting and judicial courts intervention in inefficient public procurement
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 typi...
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| Format: | Article |
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Elsevier
2018
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| Online Access: | https://eprints.nottingham.ac.uk/49573/ |
| _version_ | 1848798027750309888 |
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| author | Estache, Antonio Foucart, Renaud |
| author_facet | Estache, Antonio Foucart, Renaud |
| author_sort | Estache, Antonio |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | 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. |
| first_indexed | 2025-11-14T20:13:15Z |
| format | Article |
| id | nottingham-49573 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| last_indexed | 2025-11-14T20:13:15Z |
| publishDate | 2018 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-495732020-05-04T19:28:59Z https://eprints.nottingham.ac.uk/49573/ The scope and limits of accounting and judicial courts intervention in inefficient public procurement Estache, Antonio Foucart, Renaud 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. Elsevier 2018-01-31 Article PeerReviewed Estache, Antonio and Foucart, Renaud (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 Moral hazard; Adverse selection; Procurement https://doi.org/10.1016/j.jpubeco.2017.11.008 doi:10.1016/j.jpubeco.2017.11.008 doi:10.1016/j.jpubeco.2017.11.008 |
| spellingShingle | Moral hazard; Adverse selection; Procurement Estache, Antonio Foucart, Renaud The scope and limits of accounting and judicial courts intervention in inefficient public procurement |
| title | The scope and limits of accounting and judicial courts intervention in inefficient public procurement |
| title_full | The scope and limits of accounting and judicial courts intervention in inefficient public procurement |
| title_fullStr | The scope and limits of accounting and judicial courts intervention in inefficient public procurement |
| title_full_unstemmed | The scope and limits of accounting and judicial courts intervention in inefficient public procurement |
| title_short | The scope and limits of accounting and judicial courts intervention in inefficient public procurement |
| title_sort | scope and limits of accounting and judicial courts intervention in inefficient public procurement |
| topic | Moral hazard; Adverse selection; Procurement |
| url | https://eprints.nottingham.ac.uk/49573/ https://eprints.nottingham.ac.uk/49573/ https://eprints.nottingham.ac.uk/49573/ |