The Impact of Emergencies on Corruption Risks: Italian Natural Disasters and Public Procurement

Abstract

Theory and case studies suggest that emergencies and disasters increase corruption, especially in public procurement, hampering relief and reconstruction efforts. Despite a growing interest in the topic, including in research, there is still little systematic evidence about these effects, their structure and trajectories. We set out to investigate the medium-term impact of disasters on corruption risks, using large-scale administrative data on public tenders in Italy from 2007 to 2020, combined with data on 5 natural disasters. We employ logistic regression, coarsened exact matching and difference-in-differences estimators. We find that disasters increase corruption risks in the medium-term (3 or more years after the disaster), even more than on the short term (1 year after the disaster). In the matched and diff-in-diff analyses, we find 3%–10% points more non-open procedures used, 19%–21% points fewer call for tenders published, 19%–29% points more tenders with short advertisement period and 14%–17% points more single bidding tenders. Our findings highlight the importance of ring-fencing corruption risks associated with disaster response, especially in the medium to long term.