Are business candidates more like to use corruption to stay in office? Conflict of interest and grand corruption in Italy

What candidates benefit from corruption and favoritism in public procurement? While it is conceivable that candidates with ties to local business would be more likely to seek to benefit their business connections through the procurement process in order to gain electoral advantages, this study suggest that politicians with business ties are not more likely than other politicians to gain electoral benefits using visible procurement deceit in Italy. Using new data on the properties of local level politicians running in the 2018 Italian elections and data on corruption risks in public procurement we show that corruption risks in public procurement increase in the run up to elections. However, our Regression discontinuity design (RDD) show that the spike in pre-election single bidding do not seem to benefit politicians with ties to local business more than politicians that lack such ties. These findings may be consistent with two alternative accounts. First, that politicians’ ties to business do not matter for the extent to which they use and gain electorally from corruption. Alternatively, it suggests that politicians with ties to local businesses are oftentimes so well embedded and well versed in procurement practices and expectations that they are simply more successful when it comes to pre bid collusion. This would be particularly true for politicians that become "local strong men", i.e. politicians with ties to business that win elections by large margins. Our preliminary findings find indirect support for this latter account, since the share of pre-election single bidding is at its lowest in settings where politicians with ties to local business win elections by large margins. We also show that this result is driven by municipalities in the south of Italy, that are known to struggle with rampant corruption. Our results suggest that there is room for nuance in the interpretation of the single bid measure as a corruption risk indicator and that more work is needed to understand the business ties-corruption nexus.