Determinants of Corruption in Auctions and the Self-Perpetuation of Political Networks
Date
2024-01
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Abstract
This thesis is devoted to studying two different ways in which public power can be exploited for personal advantage to the detriment of society. The first involves a direct abuse of the public tender process when it is conducted through an auction. The second involves political elites and their tendency to attain and retain power by leveraging the boons of previously held government and political posts. The first chapter examines the role of auctioneers' payoff structure in determining their bribe solicitation preferences and the likelihood an auction is won by its highest-bidder. I conduct an auction experiment with bribery in which auctioneers' net-of-bribes payoffs depend on the size of the winning bid. When payoffs are highly dependent on winning bids auctioneers are less likely to solicit a bribe and more likely to choose the highest-bidder when requesting one. Therefore, aligning auctioneers' personal profit-maximization objectives with the desired outcome of the auction mechanism reduces the incidence and negative effects of bribery. The second chapter presents and describes a novel database of Mexican politicians who held public office between 1935 and 2009. The database includes data on politicians' educational backgrounds, elective and appointive positions in government, political party positions, special-interest positions, the private sector, and the military. It also contains information on documented personal family and social relationships of included individuals, which allows me to reconstruct political networks. For the third chapter I test the hypothesis of political elite self-perpetuation and present evidence this phenomenon involves political networks broader than families: The prominence of political and government posts a politician is able to attain increases with the prominence of positions previously held by that politician's relatives, but also those held by their friends and business and political associates. To establish the effect is causal, rather than the result of politically valuable resources and traits shared by network members, I use a peers-of-peers instrumental variables approach wherein I exploit the variation in political attainment of the friends and relatives of a politician's own friends and relatives.
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Keywords
Corruption, Auction, Bribery, Political Dynasties, Political Networks, Political Elites, Public Power
Citation
Saucedo Cepeda, A. (2024). Determinants of corruption in auctions and the self-perpetuation of political networks (Doctoral thesis, University of Calgary, Calgary, Canada). Retrieved from https://prism.ucalgary.ca.