"When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely, in your thoughts, advanced to the stage of science, whatever the matter may be."
Lord Kelvin

New Trends in Corruption Risk and Intensity of Competition in the Hungarian Public Procurement

Publications, Research Notes, Short Papers, , , ,

 

May 26, 2020

 

New Trends in Corruption Risk and Intensity of Competition in the Hungarian Public Procurement from January 2005 to April 2020. CRCB Flash Report 2020:1. Budapest: CRCB 

This report examines Hungarian public procurement data between 2005 and 2020. Data from 248,404 contracts were used for the analysis, focusing on information about corruption risk, the intensity of competition, and political favoritism.

The results show that in the first four months of 2020, corruption risk in Hungarian public procurement reached the highest level since 2005; by April 30, the share of contracts without competition was 41 percent. The control of corruption risk stabilized at a low level in 2018 and 2019. The intensity of competition in EU-funded projects has been higher than in tenders financed by Hungarian taxpayers since 2016, one year after the first discovery of anomalies in EU-funded public tenders and subsequent OLAF investigations. The share of public procurements won by crony companies within the total public procurement value has increased significantly since 2011. The risk of corruption in contracts won by these companies before parliamentary elections is reduced considerably. This appears clearly in the period between May 2017 and August 2018. At that time, there were few tenders won by crony companies without competition. This trend can also be seen between September and December 2013. Subsequently, after Fidesz won the parliamentary elections, the crony companies began to win again with higher corruption risk. During the COVID-19 pandemic, the share of non-competitive contracts among all crony companies increased significantly.

Flash Report 2020:1

List of tenders analyzed (zip)

Selected news articles in Hungarian on the owners of MGTS companies (xlsx)

Crony System in Hungary – a short video made by CRCB

Suggested citation: CRCB. 2020. New Trends in Corruption Risk and Intensity of Competition in the Hungarian Public Procurement from January 2005 to April 2020. CRCB Flash Report 2020:1, Budapest: CRCB.