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Economic Impact of Voting and Procurement Rules
Palguta, Ján ; Filer, Randall (advisor) ; Guriev, Sergei (referee) ; Gylfason, Thorvaldur (referee)
In the first chapter of this dissertation, I examine the impact of increasing the number of parties in political representation bodies on public spending and selection of politically-connected suppliers in public procurement. By exploiting plausibly exogenous variation in the vote share of parties near the representation threshold in Czech municipal elections, I find that municipalities having more parties represented in their councils allocate fewer procurements to corporate donors of political parties, attract more suppliers to procurement tenders and reduce procurement prices. The impact of broader party representation is pronounced in politically competitive councils, but is not related to whether marginally represented parties are incumbent or not. The second chapter presents evidence of how policies that create opportunities to avoid open competition in procurement lead to the manipulation of procurement values. We exploit a policy reform in which public bodies were given autonomy to preselect potential contractors below newly defined discretionary thresholds. Manipulation is revealed through bunching of procurements just below the thresholds in construction works and services, and to a lesser degree, in goods. Among manipulated contracts, we document a threefold increase in the probability...
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