Collusion Between Public Officials and Firms
On Friday 10 December 2021 Shrey Nishchal will hold a trial lecture on a prescribed topic and defend his thesis for the PhD degree at NHH.
Prescribed topic for the trial lecture:
What works and what does not, in fighting corruption
Trial lecture:
10:15 in Aud N
Title of the thesis:
The Economics of Collusion Between Public Officials and Firms
Summary:
The three chapters of this thesis focus on the risk of collusion between public officials and private firms. Such collusion leads to an exchange of favors where the officials distort decisions for firms' benefit in exchange for bribes or beneficial job offers.
The first study of this thesis, co-authored with NHH Professor Tina Søreide, is related to the resolution of cases of corporate crime through non-trial resolutions (NTRs). An NTR consists of the prosecutor offering an accused firm the option of ending legal proceedings if it acknowledges wrongdoing, pays a fine, and in some cases instates a compliance program.
Their study combines the literature on corporate crime and the literature on regulatory economics and argues that the proliferation of NTRs has made the role of a prosecutor like that of a regulator. We note certain institutional vulnerabilities in the design of the prosecutor’s office when dealing with cases of corporate crime and propose measures to reduce the possibility of collusion between the prosecutor and the firms.
The second article of this thesis, co-authored with Emmanuelle Auriol, presents an economic model of the revolving door phenomenon, where individuals in the public sector move to jobs in the private sector or vice versa. While on the one hand, the monetary benefits of revolving to the private sector can serve to attract highly skilled individuals to the public sector.
On the other hand, the possibility of future jobs in the private sector may motivate some individuals to do favors for the firms at the expense of society. One popular policy instrument to balance this trade-off is the introduction of a time gap between public and private positions, also called a cooling-off period. The study shows that a cooling-off period is only optimal in relatively less cash-constrained economies and should be longer in more innovative sectors.
The third and final chapter of this thesis, co-authored with Tina Søreide and Mihaly Fazekas, is an empirical study which utilizes data on Italian Public Procurement to analyze whether is an increase in corruption risks after natural disasters. Their results show that there is an increase in the use of procedures which are associated with higher corruption risks. However, since the study relies on an analysis of procedures and single bidding, the results must be interpreted with caution. Deviations from non-emergency procurement rules may be necessary to rapidly procure necessities. Officials may also need to legitimately prolong emergencies to deal with particularly severe disasters.
Defense:
12:15 in Aud N
Members of the evaluation committee:
Professor Gunnar Eskeland (leader of the committee), Department of Business and Management Science, NHH
Professor Sara Biancini, CY Cergy Paris Université
Professor Juan Jose Ganuza, Universitat Pompeu Fabra, Barcelona
Supervisors:
Professor Tina Søreide (main supervisor), Department of Accounting, Auditing and Law, NHH
Professor Antonio Estache, Université Libre de Bruxelles
Professor Emmanuelle Auriol, Toulouse School of Economics
The trial lecture and thesis defence will be open to the public.