Work detail

Political Connections and Distortions on Public Procurement Markets: Evidence from the Czech Republic

Author: Mgr. Alice Navrátilová
Year: 2021 - summer
Leaders: PhDr. Miroslav Palanský M.A., Ph.D.
Work type: Finance, Financial Markets and Banking
Language: English
Pages: 77
Awards and prizes:
Abstract: Corporate political connections have been shown to induce preferential treatment
towards connected firms. This thesis evaluates whether the effect of connections is
reflected in the composition of public procurement suppliers in Czechia, using
municipal procurement awarded between 2006 and 2020. In particular, we hypothesise
that changes in municipal mayors affected the rate of new procurement suppliers
following the elections in 2014 and 2018. The findings show that the rate of new
suppliers increased significantly in municipalities that elected a new mayor in the 2014
elections; however, the effects appeared to be negative in 2018. We further hypothesise
that these results can be driven by the major success of new political parties in 2014,
with a large share of new politicians being elected to office. We specifically examine
the case of ANO, the political movement that dominated both elections. We do not find
robust evidence of a surge in new suppliers in municipalities where ANO was notably
successful, suggesting that the effect was not driven only by this party and pointing to
alternative explanations.




Patria Finance
Česká Spořitelna