"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

Competitive Intensity and Corruption Risks. Statistical Analysis of Hungarian Public Procurement – 2009-2015. Data and Descriptive Statistics

March 3 2016 / May 18 2016

The report examines data from Hungarian public procurement between 2009-2015. The data from 127,776 contracts and 135,300 awardees were used for the analysis. The data were downloaded from the website of the Hungarian Public Procurement Authority (http://www.kozbeszerzes.hu/). The Public Procurement Bulletin available online interface was used for data collection, and after data clarification procedures, the data were structured into a database. The data of analysed public tenders are downloadable from the website managed by CRCB (http://tendertracking.eu/).

The paper basically uses descriptive statistics and it reviews aspects of the contracts awarded in Hungary between the years of 2009-2015. The analysis primarily focuses on information regarding the competitive intensity, price distortion, and corruption risks. Based on these data we examine the trends of the public procurement procedures in different groups (type of procedure, EU funding and non EU funding, the size of contract value, market type, industrial differences). We also deal with the appearance of crony capitalism in Hungarian public procurement procedures. Price distortion was analysed using the Benford’s Law.

The results show that between 2009-2015 the Hungarian public procurement are characterised by a reduction in competition, and increase in the number of procurements without competition, reduced transparency, and rising tendency toward price distortion and corruption risks.

The EU funded procurements have worse performance in case of corruption risks, competitive intensity, and transparency, compared with Hungarian-funded ones. The former ones are characterised by weaker competition, lower transparency, a higher level of price distortion, and higher corruption risks. The result points out the effects of crony capitalism on weakening competition and increasing price distortion, especially in EU funded public procurement.

According to our results in Hungary, the EU funds – besides their positive influence on the development of the Hungarian economy – have a special and perverse effect: they foster the practice of political favouritism and fuel crony capitalism.

 

Report in English (shortened version, pdf )

Report in Hungarian (pdf)

List of analysed HPP: contract level data (zip)

List of analysed HPP: winner level data (zip)

List of analysed HPP financed by EU with low level of competition intensity (xlsx)

List of analysed HPP financed by EU with high level of competition intensity (xlsx)

List of analysed HPP financed by EU with high level of corruption risk (xlsx)

Data of published figures with Hungarian labels (xlsx)

Data of published figures with English labels (xlsx)