When Better Bureaucracies Help Cronies Win Government Contracts

🔎 What This Paper Asks

This paper draws a sharp distinction between political control of a bureaucracy and its technical capacity. The central argument is that in politically controlled bureaucracies, stronger technical capacity can facilitate corruption: capable bureaucrats use their skills to shield favored firms from competition through complex strategies that reduce the risk of detection.

📚 Evidence From Guatemalan Municipal Contracts (2013–2019)

The argument is tested on a novel, large-scale dataset and an original measure of political networks:

• 54,623 municipal contracts awarded in Guatemala between 2013 and 2019
• 21,631 firm–politician ties linking firms and elected officials

🧠 Key Findings

• More capable bureaucracies increase the likelihood that well-connected firms win contracts via less competitive processes.
• The mechanism is procedural sophistication: technically skilled bureaucrats implement complex, low-profile manipulations that favor friends while minimizing detection.

⚖️ Why It Matters

The results challenge the common assumption that improving technical capacity alone reduces corruption. Findings offer concrete policy lessons for anti-corruption reform, introduce a widely applicable measure of political networks, and provide new insights into how bureaucratic capacity and political control interact as sources of corruption.