Panel Paper:
The Effects of E-Procurement on Corruption in Public Procurement
Monday, July 29, 2019
40.047A - Level 0 (Universitat Pompeu Fabra)
*Names in bold indicate Presenter
A large amount of public procurement of goods and services, especially related to capital expenditures, makes procurement activities very vulnerable to corruption. In Indonesia, corruption in public procurement ranks number two of all the corruption cases handled by the Corruption Eradication Commission (KPK) and one of the government efforts to eradicate it is by introducing electronic procurement to improves efficiency as well as transparency. This study estimates the effects of e-Procurement on the number of corruption cases in public procurement in Indonesia by analyzing the implementation of e-procurement policy at the national level started in 2008. By using the difference-in-differences-in-differences (DDD) approach to the negative binomial regression model, this study analyzes panel data on 103 corruption cases in public procurement in Indonesia that have been handled by KPK during the period of 2005-2017. The estimation results show that the implementation of e-Procurement is significantly associated with a decrease in the number of corruption cases in public procurement in provinces which have a relatively high capital expenditure to total public procurement ratio. The findings suggest that provinces with a high capital expenditure to total public procurement ratio have a higher risk of corruption, thus have the biggest policy impact from the implementation of e-procurement policy in terms of reducing the number of corruption in public procurement.
