The Value of Revolving Doors in Public Procurement

Barbosa, Klenio and Straub, Stéphane (2017) The Value of Revolving Doors in Public Procurement. TSE Working Paper, n. 17-873, Toulouse

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This paper investigates the impact of revolving door movements on public procurement outcomes. We combine 10 years of procurement contracts in the Brazilian health sector with a comprehensive employer-employee dataset tracing individual job experience and characteristics to identify how movements of individuals between public administrations and private providers affect the total number of contracts, quantities, and acquisition prices. We analyze career changes in both directions between public bodies and private suppliers, and provide evidence of significant direct effects, spillovers to other firms and administrations, impact on workers’ remuneration, and on aggregate spending. We uncover positive and negative effects of revolving door on the efficiency of procurement, which are, respectively, consistent with reward for high-skill workers’ signaling competence and collusive behavior. In particular, we find that effects of administration-to-supplier connections are beneficial to public bodies, while effects of supplier-to-administration ones are detrimental. Their aggregate impacts on spending are, respectively, –3% and +2% of total procurement outlays. These results point to specific and unexpected policy implications related to the tolerance of revolving door practices.

Item Type: Monograph (Working Paper)
Language: English
Date: December 2017
Place of Publication: Toulouse
Uncontrolled Keywords: Procurement, Revolving door, Public Officials Career Path, Personnel Economics
JEL codes: D72 - Economic Models of Political Processes - Rent-Seeking, Elections, Legislatures, and Voting Behavior
D73 - Bureaucracy; Administrative Processes in Public Organizations; Corruption
H11 - Structure, Scope, and Performance of Government
H57 - Procurement
J45 - Public Sector Labor Markets
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 17 Apr 2018 08:07
Last Modified: 17 Apr 2018 08:07

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