Procurement and Competition in Swedish Municipalities.

Abstract

This paper asks if low political competition is associated with manipulation of public procurement pro-cesses. Using unique Swedish municipal data from 2009 to 2015, it demonstrates that when one party dominates local politics, procurement quality decreases and corruption risks increase. Most striking is that the risk for getting only one bid on what is intended to be an open tender considerably increases with longstanding one-party-rule. Findings suggest that entrenched parties are able to exert favoritistic control over public procurement due to less well-functioning internal and external control mechanisms: bureau-cratic human capital decreases, municipal audits are more prone to be controlled by the ruling majority, and politicians are less susceptible to media pressure. These results are particularly interesting from a comparative perspective since Sweden, being an old democracy with a meritocratic bureaucracy, low levels of corruption and clientelism is an unlikely case in which to find these tendencies.