CEU Electronic Theses and Dissertations, 2019
| Author | Wachs, Johannes |
|---|---|
| Title | Network Approaches to the Study of Corruption |
| Summary | Though corruption is a broad notion encompassing many kinds of behavior, it always has a relational aspect. Consider how a driver bribes a policeman, how a minister steers a contract to build a hospital to his son-in-law's construction company, how two managers from different firms agree to avoid competition in a region, or how a regulator goes easy on a potential future employer during an audit. The observation that connections and interactions between people, firms, and institutions are where corruption happens is not a new one, but certainly merits further investigation. A better understanding of the relationship between connectivity and corruption can explain why we still struggle to defeat the latter. This thesis applies the methods of network science to the study of corruption and its relationship with markets and society. I argue that corruption emerges from specific patterns of interactions that can productively be described using networks. The dyads of actors engaging in a corrupt behavior, the driver and policeman, minister and son-in-law, etc., are embedded in networks of social relations that facilitate corruption. Within this framework, the thesis addresses several questions about corruption. Why does corruption persist in certain communities? How does corruption relate to the organization of markets? How does corruption emerge when it depends on cooperation in highly adverse circumstances? I address these questions empirically using newly available micro-level data on corruption risks in public procurement. Starting with a study of Hungarian towns, I relate corruption risk in local government contracts to the structure of their social networks. I find that fragmented towns have higher corruption risk, while towns with residents that have diverse connections have less. This suggests that corruption is embedded in the social networks of places. Next I zoom out to the national level, comparing the procurement markets, conceptualized as networks of issuers and winners, of different countries. I find a strong relationship between centralization and corruption risk. On the other hand, heterogeneity in market responses to changes in government across the EU suggests that corruption can be organized in many different ways. Finally, I investigate cartels, or groups of firms that illegally agree to avoid competition. By drawing networks of firms that bid for the same contract I highlight niches in markets where cartels are more likely to thrive. |
| Supervisor | Kertesz, Janos |
| Department | Network Science PhD |
| Full text | https://www.etd.ceu.edu/2019/wachs_johannes.pdf |
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