Practices of public procurement and the risk of corrupt behavior before and after the government transition in M\'exico

TL;DR

This study analyzes how a major government transition in Mexico affected public procurement practices and corruption, revealing a decrease in resources spent with corrupt companies but persistent risky contracting patterns.

Contribution

It introduces a statistical framework to compare contracting practices before and after government change, highlighting persistent corruption risks despite resource reductions.

Findings

Resources spent with corrupt companies decreased significantly.

Many contracting patterns remained unchanged post-transition.

Some changes suggest increased corruption risk.

Abstract

Corruption has a significant impact on economic growth, democracy, and inequality. It has severe consequences at the human level are incalculable. Public procurement, where public resources are used to purchase goods or services from the private sector, are particularly susceptible to corrupt practices. However, government turnover may bring significant changes in the way public contracting is done, and thus, in the levels and types of corruption involved in public procurement. In this respect, M\'exico lived a historical government transition in 2018, with the new government promising a crackdown on corruption. In this work, we analyze data from more than 1.5 million contracts corresponding from 2013 to 2020, to study to what extent this change of government affected the characteristics of public contracting, and we try to determine whether these changes affect how corruption takes place. To do this, we propose a statistical framework to compare the characteristics of the contracting practices within each administration, separating the contracts in different classes depending on whether or not they were made with companies that have now been identified as being involved in corrupt practices. We find that while the amount of resources spent with companies that turned out to be corrupt has decreased substantially, many of the patterns followed to contract these companies were maintained, and some of those in which changes did occur, are suggestive of a larger risk of corruption.