Bidding despite corruption: evidence from Honduras
ISSN: 1535-0118
Article publication date: 17 August 2021
Issue publication date: 30 November 2021
Abstract
Purpose
In addition to lower value for money and the loss of trust in government, procurement corruption threatens to produce a vicious cycle whereby honest firms self-select out of public procurements, further increasing corruption and decreasing value for money. This paper aims to explore this vicious cycle hypothesis.
Design/methodology/approach
This paper uses a survey of businesses registered with the procurement regulator in Honduras, a country with high grand corruption but low levels of administrative procurement corruption. The study uses the survey to test the effects of experiences and perceptions of corruption and personal connections on perceptions of fairness and intention to bid on future procurements.
Findings
This study finds that experiences with bribery and the perceived importance of personal and party connections undermine perceptions of fairness, particularly for firms bidding with Honduras’s public works agency. While firms that have not bid recently view the process as less merit-based than those that have, the study does not find that perceptions of fairness influence intention to bid in the future as the vicious cycle hypothesis would suggest.
Social implications
This research suggests that even firms that are frustrated with procurement irregularities are willing to tolerate them to access government markets.
Originality/value
The study benefits from a unique survey of businesses on issues of corruption and connections in a challenging procurement environment.
Keywords
Acknowledgements
Author grateful to the work and analysis of Social Impact colleagues Irma Romero, Lisette Anzoategui, Tommie Thompson, Jordan Sticklin, Basab Dasgupta, and colleagues at Espirálica, who participated in data collection and analysis. I also owe a debt to staff at the Millennium Challenge Corporation and the Millennium Challenge Account-Honduras, the Oficina Nacional de Compras y Adquisiciones del Estado (ONCAE), and other study participants. In particular, I would like to acknowledge Rabia Chaudhry, John Wingle, Marco Bogran, Evelyn Bautista, Mariana Ríos, Sofia Romero, Jacinto Reyes, and Luis Villalta. Many thanks to Stephen Morris and Kurt Alan Ver Beek for comments. Finally, I am grateful to the Woodrow Wilson Center for the time and financial support to write this article and the assistance of interns Natasha Oveida and Dylan Walsh.
Citation
Sabet, D.M. (2021), "Bidding despite corruption: evidence from Honduras", Journal of Public Procurement, Vol. 21 No. 4, pp. 399-417. https://doi.org/10.1108/JOPP-07-2020-0058
Publisher
:Emerald Publishing Limited
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