Public corruption in the government procurement process is rampant and its cost is huge, even among developed countries. Some scholars estimate that about 20%–30% of the values of government projects are lost due to public corruption. In this paper, we examine how public corruption impacts the allocation of U.S. federal contracts. Using the U.S. Department of Justice corruption convictions data and the federal contract data from 2000 to 2018, we find that firms located in more corrupt states receive more federal contract dollars, more important contracts in terms of their contributions to firm revenues, and contracts with higher visibility among federal contractors. We construct an influence/favoritism index that takes into account defense contracts, cost-plus contracts, and multi-year contracts, and document that the index is positively related to corruption levels. These results hold after we conduct several robustness tests, including 2SLS regressions, propensity-score matching analysis, and using alternative corruption measures. Our empirical findings are consistent with the hypothesis that corruption plays an important role in how federal contracts are allocated.

中文翻译：

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公共腐败与政府合同的分配

政府采购过程中的公共腐败猖獗，其成本巨大，即使在发达国家也是如此。有学者估计，政府项目的价值约有 20% 至 30% 因公共腐败而损失。在本文中，我们研究了公共腐败如何影响美国联邦合同的分配。使用美国司法部 2000 年至 2018 年的腐败定罪数据和联邦合同数据，我们发现位于更腐败州的公司获得更多的联邦合同美元，就其对公司收入的贡献而言更重要的合同，以及更高的合同联邦承包商之间的知名度。我们构建了一个考虑国防合同、成本加成合同和多年期合同的影响/偏爱指数，并记录该指数与腐败水平正相关。在我们进行了多项稳健性测试（包括 2SLS 回归、倾向得分匹配分析和使用替代腐败措施）后，这些结果仍然成立。我们的实证研究结果与腐败在联邦合同分配方式中发挥重要作用的假设一致。