"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

Political favoritism in public tenders in Hungary. Analysis of the odds of winning

Publications, Working Papers, , , , ,

 

November 30, 2021

 

Tóth, I. J. and Hajdu, M. 2021. Political favoritism in public tenders in Hungary. Analysis of the odds of winning. Working Paper Series: CRCB-WP/2021:1. Budapest: CRCB.

The paper investigates the crony system in Hungary based on data of more than 227,000 public tenders from 2005 to 2020. The paper’s novelty is the analysis of odds of winning of crony and ordinary companies in public procurement that is a new approach to measure the strength of political favoritism and investigate crony system. We consider crony companies whose owners have family or friendships with the Hungarian Prime Minister (Viktor Orban) or one member of his government.  The results point out that the crony companies have very high odds of winning. Their odds are significantly higher than those of ordinary Hungarian companies. We interpret these results as a sign of political favoritism and the prevalence of the crony system.

CRCB-WP/2021:1.