Bureaucratic discretion and contracting outcomes

We find that federal bureaucrats award more, larger, and less risky contracts to politically connected firms when they have greater discretion over contracting outcomes. Using a sample of 4.3 million federal government contract actions obligating $2.47 trillion between 2000 and 2015, we show that th...

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Bibliographic Details
Published inAccounting, organizations and society Vol. 88; p. 101173
Main Authors Boland, Matthew, Godsell, David
Format Journal Article
LanguageEnglish
Published Elsevier Ltd 01.01.2021
Elsevier Science Publishers
Subjects
Business schools
Corporate political activity
Government spending
Monitoring and control
Procurement contracts
Public contracts
M48
D73
Procurement contracts
Monitoring and control
Corporate political activity
Government spending
G38
H5
D72
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Summary:We find that federal bureaucrats award more, larger, and less risky contracts to politically connected firms when they have greater discretion over contracting outcomes. Using a sample of 4.3 million federal government contract actions obligating $2.47 trillion between 2000 and 2015, we show that this result varies predictably across contract and agency characteristics, over time, and in placebo tests, and is robust to a comprehensive fixed effect structure and seven alternate measures of political connectedness. Our evidence illustrates the overlooked role of the bureaucrat in facilitating political bias in federal contracting outcomes.
ISSN:0361-3682
1873-6289
DOI:10.1016/j.aos.2020.101173