Insights from a large-scale research project on government spending across Europe
Dr Mihály Fazekas, University of Cambridge
This seminar is open to LLM students, all internal and external academic staff and research students. Places for seminars need to be reserved for catering purpose since a basic buffet lunch will be provided from 12.50pm onwards. Please reserve your place in advance by email to vicky.spencer1@nottingham.ac.uk by 1 February. If you are free at 12.50pm please arrive at that time to collect your food so that the seminar can start promptly at 1pm.
Biography
Dr Mihály Fazekas completed his PhD at the University of Cambridge in 2014 pioneering novel Big Data methods to measure and understand high-level corruption, state capture, and state capacity in Central- and Eastern Europe. Now, he works at the University of Cambridge as the scientific coordinator of the Horizon 2020 funded project DIGIWHIST. This large-scale research project uses a Big Data approach to measuring corruption risks, administrative capacity, and transparency in public procurement. He has also taken a leading role in other research projects on corruption such as ANTICORRP; and directs a think-tank, Government Transparency Institute, specializing in using Big Data to understand government performance.
He holds three master degrees in economics, public policy, and teaching. He has experience in both quantitative and qualitative methods in diverse fields such as economics, public policy, and political science acquired in numerous research projects across Europe. He has worked for the European Commission, OECD, World Bank, RAND Europe, Ecole Nationale d’Administration, Hertie School of Governance, and Hungarian Academy of Sciences. Together with Bence Tóth and István János Tóth, he was awarded on two occasions the first prize in the U4 Anti-Corruption Resource Centre competition for the best new proxy measure of corruption.
Seminar
The talk is divided into two parts, the first provides an overview of the ongoing EU funded large-scale research project DIGIWHIST. It collects transaction-level public procurement data in 35 European countries and develops objective proxies for corruption, transparency, and administrative capacity to support research and government accountability. Indicators characterise public tenders, bidding firms, public buyers, as well as individuals in leadership positions. As the underlying datasets are very diverse capturing purchasing activities by all levels of government and also state owned enterprises, and they are also wide in geographical scope, the research implications are widespread opening new research avenues combining law, economics, and political science.
The second part, using novel data and indicators from a Europe-wide public procurement dataset for 2009-2014, investigates whether the European Commission and its judicial arm, the Court of Justice of the European Union are effective in safeguarding the single market in government contracts by changing market behaviour rather than merely instigating legal change. We look at two distinct causal mechanisms: i) requiring a change in national public procurement legislation; and ii) striking down anticompetitive practices while leaving legislation unchanged. Theoretically, it is unclear whether any of these interventions would result in a lasting improvement in competitive outcomes such as the number of bidders, supplier composition, and discounts offered, as well as in public sector tender design such as procedure types or open advertisement.
Using matched samples difference-in-differences estimation, we find that requiring legislative change has a significant and sizeable positive impact on market openness: it increases the number of bidders (1.8-3%), lowers the incidence of single bidding (3-4%), decreases the market share of local winners (3-4%), and lowers prices (0.4-0.6%). Requiring change in anticompetitive practices has no discernible impact. The policy implications are profound, in order to improve the EU-wide single market of government purchases, better monitoring and stronger supranational legal action are needed.