The extent and cost of corruption in transport infrastructure. New evidence from Europe

The extent and cost of corruption in transport infrastructure. New evidence from Europe Transport infrastructure provision from roads to waterways involves large amounts of public funds in very complex projects. It is hardly a surprise that all across Europe, but especially in high corruption risk countries, it is a primary target of corrupt elites. This article provides a state-of-the-art review of the literature on the cost of corruption and estimates the level of corruption risks and associated costs in European infrastructure development and maintenance in 2009–2014 using novel data on over 40,000 government contracts. Two forms of corruption costs are investigated in the empirical section: (1) distorting spending structure and project design, and (2) inflating prices. Findings indicate that corruption steers infrastructure spending towards high value as opposed to small value investment projects. It also inflates prices by 30–35% on average with largest excesses in high corruption risk regions. Contrary to perceptions, corruption risks in infrastructure are decoupled to a considerable extent from the national corruption environment. Source data and risk scores are made downloadable at digiwhist.eu/resources/data. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Transportation Research Part A: Policy and Practice Elsevier

The extent and cost of corruption in transport infrastructure. New evidence from Europe

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Publisher
Elsevier
Copyright
Copyright © 2018 Elsevier Ltd
ISSN
0965-8564
eISSN
1879-2375
D.O.I.
10.1016/j.tra.2018.03.021
Publisher site
See Article on Publisher Site

Abstract

Transport infrastructure provision from roads to waterways involves large amounts of public funds in very complex projects. It is hardly a surprise that all across Europe, but especially in high corruption risk countries, it is a primary target of corrupt elites. This article provides a state-of-the-art review of the literature on the cost of corruption and estimates the level of corruption risks and associated costs in European infrastructure development and maintenance in 2009–2014 using novel data on over 40,000 government contracts. Two forms of corruption costs are investigated in the empirical section: (1) distorting spending structure and project design, and (2) inflating prices. Findings indicate that corruption steers infrastructure spending towards high value as opposed to small value investment projects. It also inflates prices by 30–35% on average with largest excesses in high corruption risk regions. Contrary to perceptions, corruption risks in infrastructure are decoupled to a considerable extent from the national corruption environment. Source data and risk scores are made downloadable at digiwhist.eu/resources/data.

Journal

Transportation Research Part A: Policy and PracticeElsevier

Published: Jul 1, 2018

References

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