Corruption Networks by Unknown

Author:Unknown
Language: eng
Format: epub
ISBN: 9783030814847
Publisher: Springer International Publishing

5.3.3 Measuring Corruption Risk

Having established that the defence industry, in particular its procurement arm, merits examination, we turn to the topic of measuring corruption risks. An emerging field of research quantifies corruption risks in public procurement using contract-level indicators that track the extent to which a contract’s award deviated from a norm of free and impartial competition [9].

For example, a contract awarded directly to a firm without competition clearly present a corruption risk. Competitors are often excluded in subtle ways, for instance by onerous and specific requirements for past experience or by the imposition of an impossibly short deadline to submit tenders. In these cases, the requirements might be tailored to the favored firm and the firm can be tipped off ahead of time about the call for tenders. Pooled together into a composite measure, these indicators provide a fine-grained, data-driven proxy for corruption risk in procurement contracts. Aggregated to regional and national levels, these indicators have a strong correlation with generally accepted measures of corruption prevalence [7]. They have been used to evaluate, among other things, the effectiveness of meritocratic promotion in improving quality of government [3].

Another great advantage of these micro-level measures of corruption risk is that they offer the opportunity to study the distribution of corruption risks within a country, market, or region. By mapping procurement markets as bipartite networks of contracting among buyers and suppliers, one can go beyond averages and study the complex organization of corruption. In general, it is known that corruption risks predict missing contracting edges, suggesting that corruption is about exclusion of non-favored competitors [10]. Corruption risks are also reflected in market structure across politically meaningful elections: network neighborhoods of high corruption risk actors rewire significantly across change in government [10]. While corruption risk indicators alone cannot prove corruption has taken place, they offer an alternative perspective on this important issue by searching for traces of organized bad behavior in broad data.

The network perspective has also given new insight into the phenomenon of capture of specific parts of a state by corrupt actors [12]. This manifests as clusters of highly corrupt actors in procurement market networks [34]. When such clusters exist in the center of a country’s procurement network, this suggests that the situation is especially dire [8]. Altogether, this line of research reflects a growing recognition that corruption and economic crime in general is organized among many individuals and actors in a complex way [1, 18, 19, 30, 31].

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