Political connections and ruling in public procurement disputes: Are the decisions of the Czech Office for the Protection of Competition politically biased?
| Thesis title in Czech: | Politické konexe a rozhodování ve sporech o veřejných zakázkách: Jsou rozhodnutí ÚOHS politicky motivovaná? |
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| Thesis title in English: | Political connections and ruling in public procurement disputes: Are the decisions of the Czech Office for the Protection of Competition politically biased? |
| Key words: | Veřejné zakázky, politické konexe, dohled nad veřejnými zakázkami, korupce, dary politickým stranám |
| English key words: | Public procurement, political connections, procurement oversight, corruption, political donations |
| Academic year of topic announcement: | 2017/2018 |
| Thesis type: | Bachelor's thesis |
| Thesis language: | angličtina |
| Department: | Institute of Economic Studies (23-IES) |
| Supervisor: | PhDr. Miroslav Palanský, Ph.D. |
| Author: | hidden - assigned by the advisor |
| Date of registration: | 02.05.2018 |
| Date of assignment: | 13.06.2018 |
| Date and time of defence: | 09.09.2020 09:00 |
| Venue of defence: | Opletalova - Opletalova 26, O105, Opletalova - místn. č. 105 |
| Date of electronic submission: | 31.07.2020 |
| Date of proceeded defence: | 09.09.2020 |
| Opponents: | prof. Petr Janský, Ph.D. |
| URKUND check: | |
| References |
| 1. Bajari, P. & Tadelis, S. (2001). Incentives versus transaction costs: A theory of procurement contracts. RAND Journal of Economics, 32(3), p. 387–407. Retrieved from http://www.jstor.org/stable/10.2307/2696361.
2. Faccio, M. (2006). Politically Connected Firms. The American Economic Review, 96(1), 369-386. Retrieved from http://www.jstor.org/stable/30034371 3. Goldman, E., Rocholl, J. & So, J. (2013) Political Connections and the Allocation of Public Procurement. Review of Finance, 1 pp. 1-32 4. Gordon, D. I. (2006): Constructing a Bid Protest Process: Choices Every Procurement Challenge System Must Make. Public Contract Law Journal 35. 5. Kameník, M. (2011). Otevřenost zadávacích řizení v ČR. Oživení, Praha. ISBN 978-80-904829-2-0 6. Ministerstvo pro místní rozvoj ČR (2016). Výroční zpráva o stavu veřejných zakázek v České republice [online]. Praha. Retrieved from: http://www.portal-vz.cz/getmedia/596b6316-9683-4f9e-8157-a42211f60404/III_Vyrocni-zprava-o-stavu-verejnych-zakazek-v-Ceske-republice-za-rok-2016_final.pdf 7. Méon, P. G. & Sekkat, K. (2005). Does corruption grease or sand the wheels of growth? Public choice, 2005, Vol. 122, No. 1, p. 69–97. 8. Nedvěd, A., Ducháček, T., & Skuhrovec, J. (2017). Rozhodovací praxe ÚOHS – Mýty a fakta. Studie 1/2017. EconLab. Retrieved from: http://www.econlab.cz/wp-content/uploads/2014/10/2017-01-26-studie-uohs-final.pdf 9. OECD (2017), Government at a Glance 2017, OECD Publishing, Paris. Retrieved from: http://dx.doi.org/10.1787/gov_glance-2017-en. 10. Pavel, J. (2009). Efektivnost fungování kontrolních systémů veřejných zakázek v České republice. Transparency International – Česká republika. Praha. ISBN 978-80-87123-10-2 11. Shleifer, A., & Vishny, R. W. (1994). Politicians and Firms. Quarterly Journal Of Economics, 109(4), 995-1025. |
| Preliminary scope of work in English |
| Research question and motivation
The data about financial support of firms and individuals to politicians provide an incentive for research as the connections between businesses and politics raises the problem of conflict of interests. Due to the trend of increasing transparency of government and so called open data that has occurred all over democratic countries, researching these themes becomes easier. In this thesis I would be looking at the decisions of the Office for the Protection of Competition, whose aim is among others to control and oversee the outcomes in public procurement. The main intention of this thesis is to examine if there is a significant difference between the outcomes of disputes for firms that are politically connected and those that are not. If this would be the case, then by how much? What is the ratio between firms that have connection and those that do not in the disputes and this ratio in the lost or won cases? Do the punishments that the Office imposes differ? Apart from the private area, when the municipal councils in the cities are controlled by political parties connected to businesses, are those businesses advantaged? In this case, by how much and which cities are those? Contribution Lots of studies researching public procurement cases and overall effect of political connections on them have been done, however most of them were done in the field of obtaining a public contract. My thesis examining the decisions of the Office for the Protection of Competition would contribute to this theme from a different side, as the focus of this work will be on the controlling organ. Methodology In the first part of my thesis I would sum up the existing literature on public procurement in the Czech Republic and its legal framework. In the second part I would use publicly available data on donations of the legal entities and private persons to the political parties that were gathered by EconLab, an economic think tank focused on public policy. Then I would investigate in which cities the municipal councils are led by political parties that are supported by businesses, for which I would use EconLab’s internal dataset which I would update. Then I would merge these data sources with the data on decisions of Office for Protection of Competition that can be used to search for the cases in which the subject is politically connected firm and to compare them to the rest of the cases. Focusing on firms with political connections and on cities which have municipal councils led by parties with notable donations, I could then research if the politically connected firms are more likely to win and if my data are supported by statistical significance. I could also test the hypotheses mentioned before, and after that, I would sum up the results that have been provided by the data. Outline 1. Introduction 2. Literature review 2.1. Related Literature 2.2. Czech legal framework 3. Empirical part 3.1. Data description, used methodology 3.2. Data analysis 3.3. Testing hypotheses 4. Result 5. Conclusion |