Program on Political Economy Seminar


Thursday, October 1, 2020, 4:30pm to 5:45pm


Zoom - see below

Zoom links for Political Economy Seminar are distributed via the seminar's mailing list. You can sign up for the list using this link:

All interested faculty and students are invited to attend.

Today's presenter:

Juan Vargas, Universidad del Rosario, "Corruption in the Times of Pandemia" (with Jorge Gallego and Mounu Prem) (Download paper below)


The public health crisis caused by the COVID-19 pandemic, coupled with the subsequent economic emergency and social turmoil, has pushed governments to substantially and swiftly increase spending. Because of the pressing nature of the crisis, public procurement rules and procedures have been relaxed in many places in order to expedite transactions. However, this may also create opportunities for corruption. Using contract-level information on public spending from Colombia’s e-procurement platform, and a difference-in-differences identification strategy, we find that municipalities classified by a machine learning algorithm as traditionally more prone to corruption react to the pandemic-led spending surge by using a larger proportion of discretionary non-competitive contracts and increasing their average value. This is especially so in the case of contracts to procure crisis-related goods and services. Additionally, in places that rank higher on our corruption scale,contracts signed during the emergency are more likely to have cost overruns, be awarded to campaign donors, and exhibit implementation inefficiencies. Our evidence suggests that easing procurement rules in response to large negative shocks may increase corruption, and thus governments that encourage spending should also bolster instances of monitoring and oversight.

Co-sponsored by FAS and IQSS, the Program on Political Economy (PE) supports research-related activities that integrate the study of economics and politics, whether by studying economic behavior in the political process or political behavior in the marketplace. In general, positive political economy is concerned with showing how observed differences among institutions affect political and economic outcomes in various social, economic, and political systems and how the institutions themselves change and develop in response to individual and collective beliefs, preferences, and strategies.

juan-vargas_corruptioncovid_v2.pdf1.13 MB