ART - COLLUSION BETWEEN PUBLIC PROCURERS AND SUPPLIERS - Journal of Public Procurement - 2016

The document discusses corruption in Japan's public procurement system, specifically focusing on bid-rigging cases and the incentive for corruption in the procurement of "experience goods." It presents tables showing the number of corruption cases prosecuted and their characteristics. The document highlights that corruption cases are frequent in public works projects, with 69% of the cases occurring in this sector. The most common illegal action in bid-rigging cases is the leakage of secret tendering information by government officials to bidders. Surprisingly, in many cases, corrupt officials did not receive any bribe. The document then delves into the incentive for corruption in the procurement of "experience goods," which are goods and services whose quality cannot be confirmed by government officials before procurement. It explains that the complexity of public works projects makes it difficult for the government to assess the quality of the procured goods, creating an opportunity for corruption. To illustrate this incentive, the document provides a game-theory framework. In this framework, at the first stage, the official selects an auction type: simple price or non-price.