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TRabajo de muestra en inglés- relación entre corrupción y selección de infraestructuras públicas

 

 

Introduction

 

Background

 

In the current context, governed by new dynamics that make it essential to reflect on the role of public management on the use of urban spaces in the face of phenomena such as gentrification or “smart cities”, the responses that can be offered by political bodies are influenced by ideologies (Borja, 2011, Grossi and Pianezzi, 2017).

 

Public space increasingly occupies a leading role in the administration of cities (Di Maso, 2007, Hackworth, 2007, Delgado and Malet, 2011), since it is the scenario in which policy making takes place, and the object of urban interventions. This circumstance has given rise to the fact that it has become one of the central aspects of political discourse, from which the allusions to the public space are connected with concepts such as the exercise of citizenship or the principles of equality of which democracy has appropriated in recent decades (Delgado and Malet, 2011).

 

Indeed, the very concept of public space, when defined, is affected by the ideology and we can trace nuances that configure it as a harmonious environment, a meeting point in which all strata of society converge (Díaz, 2012). Consequently, public space is opposed to the private sphere and becomes the context in which people and administration coincide and exchange symbolic messages (Peck, Theodore and Brenner, 2009).

 

Investments in urban infrastructure are the pillars of growth, productivity and economic competitiveness, both for developing countries and for developed countries, given their contribution to economic progress and their impact on the productivity and competitiveness of their economies (Vives, Benavides and Paris, 2009, 413). But, at the same time, these investments are what shape the city, provide it with networks, facilities, buildings and symbols that support the city model that wants to be achieved (Bisel, 1996). Of these investments, those destined for public services are promoted by the different levels of administration (in Spain, local, regional or state) and, consequently, are a main component of electoral campaigns, in which one of the units of most transcendental rhetoric correspond to the reflection on infrastructure. Jointly, the decisions on public investments are regulated by norms that pursue among their objectives that these infrastructure modernize and develop the country, generating an added value for citizens, which implies that the decision making on these investments must be bounded by the margins current laws, which, in turn, will have been adopted within a legislature and could be influenced by the dominant ideology at that time.

 

 

 

Research Question

 

Kemmerling’s and Stephan’s studies (2002, p.403) suggest that political ideology exerts a great weight on the decisions that are made in relation to the investment in infrastructure; thus, for cities that share a political sign with the central government, obtaining budget allocations for infrastructure is simpler than for those with conflicting ideologies. This circumstance is very relevant, given that infrastructure is one of the strategic elements to generate value in society, which makes it necessary to reflect and investigate this relationship that is established between the ideology and investment decisions made in the political arena to develop public spaces. In particular, the research is contextualized in Spain and reference will be made in the analysis to the way in which decisions concerning the structure of public spaces are made.

 

In this regard, it must be borne in mind that Spain in recent decades has multiplied the administrative milestones that have to be overcome to make decisions, having instituted new monitoring structures and obligations that have been founded to hinder inherent problems, such as corruption.

 

Aim and Objectives

 

The aim is to verify if the political role has an influence and, secondly, evaluate how strong this influence is.

 

 

Considering the above, the formulated research questions are the following:

 

  • Does political ideology influence the selection of infrastructure?
  • Are investment projects in infrastructure used as electoral weapons?
  • How is decision making made and in what processes can political ideology influence each phase?

 

 

Limitations

 

Political ideologies are represented in society through political actors; However, in practice, political actors can exhibit behaviours that are influenced not only by ideology, but also by other personal motives that can lead to making public management decisions that respond to individual needs (Woodall, 1996, Tanzi and Davoodi, 1998). The problem of corruption, which has become one of the main challenges of the contemporary world, is one of the limitations found in this project, since unfortunately, investment in infrastructure is not always a decision taken considering the needs of citizens (Osei-Tutu, Badu, Owusu-Manu, 2010).

In this regard, it has been explained that the importance of corruption is not correlated with an approach in public management trials and research, where reference to this important dimension has often been overlooked (Locatelli et al., 2017). The lack of information that can be found about the decisions that have been taken from the managerial level using personal motivations as decision criteria is a limitation in this project, which could lead to labelling as an ideological approach, a decision that in practice, responds to other interests.

 

 

 

Literature Review

 

  1. Public Infrastructure and actors that promote it

 

The concept of public infrastructure includes a broad spectrum of types of goods, such as roads, airports, ports, railways, etc., which share their capacity to generate added value to a society and which are also the result of investment of public heritage in its construction (Alonso and Freire, 2001; Jiménez, 2001). Therefore, investment in public infrastructure is detailed in the general budgets of a country, since it is public bodies that are responsible for promoting them (Alonso and Freire, 2001).

According to Jiménez (2001), public works are characterized by the purposes for which they are built, which are to meet the collective needs of society or to provide a general use. Public infrastructure are endowments that will be used by all the citizens who need them and, with exceptions, all citizens will be able to use them. From the point of view of the agent that promotes the investment, Jiménez (2001) has explained that these are publicly owned. In this regard, it has usually been understood that public infrastructure was an equivalent term to "public property" and that the concept of ownership of these components, the State, was also included in its concept.

 

According to Jiménez (2001), public infrastructure is used free of charge, at the expense of the “General State Budgets”, which means that this investment that is made will never be amortized, since no income will be generated through it, from which the State can recover for the incurred expenses. This circumstance, for Jiménez (2001) makes it necessary to ask about its profitability, since this will not be obtained directly, since the use of the infrastructure will not generate any economic flow. However, the value it generates is understood in terms of utility, and from this point of view, it is considered that the realization of these investments is essential, since the State has to ensure the existence of a set of public services and services that are the pillars of the Welfare State. 

 

 

  1. What are the main steps in the public infrastructure procurement process?

 

Various decision-making processes are carried out to construct public infrastructure. These are related to multiple areas (Tanzi, 2004, Gherghina and Volintiru, 2017). 

A typical process, according to Tanzi (2004) is as follows:

 

  1. Type of infrastructure that is going to be built is individualized (for example, an airport). This first step exclusively determines what will be built.

 

  1. Characteristics and design are specified.

 

  1. The bidding process begins and offers are received from companies that want to execute this public work.

 

  1. Different offers are analysed and negotiated with the companies.

 

  1. Finally, the tender is approved and contracted.

 

After the commissioning, different processes of supervision of the execution of the agreed-upon contributions/provisions/benefits will have to be carried out, which are also tasks that government entities must deal with (Gherghina and Volintiru, 2017).

 

On the other hand, according to Tanzi (2004), it has been explained that during the whole process there are different important influences, since companies will try to be selected to deal with the projects. Different actions may take place that can alter the equity between the different companies that compete, given that some of them will try to obtain privileged information on what type of infrastructure the decision making actors that will prefer, and, consequently, make a "custom design" or offer personal payments as a consideration to those who choose the project.

 

These actions have as a first result an alteration of competition and on the other hand will entail an increase in the final price that will increase public spending, since prices tend to rise to meet the following circumstances (Tanzi, 2004; Haque and Kneller, 2008; White, 2015):

 

  • Cover the costs associated with the personal payments that will be made in favour of the decision makers.
  • Include in the price the possibility of making changes in the process to adjust them to the personal preferences of those who decide.

 

In addition, according to Tanzi (2004) another risk that is noticed is the possibility that companies tend to lower the quality of materials or labour in order to make all the personal payments demanded by public agents, which gives rise to a very pernicious situation for citizens: the cost of public infrastructure is very high, but it does not translate into an efficient investment, as a significant volume of investment is lost along the way and ends up in private hands that don’t bring any benefit.

 

  1. What are the types of selection purchases/financing models?

 

The traditional selection processes used for the planning and prioritization of the infrastructure are subject to detailed evaluation frameworks that are based on the evaluation of different economic and quality aspects to make the prioritized decision (White, 2015). Through these instruments, the existing offer is prioritized and the company in favour of which the project will be tendered is established.

On the other hand, infrastructure projects are usually carried out through the following primary financing modalities (Zhang, 2004):

 

- Through state funds

- Through public-private partnerships (which are a hybrid vehicle where capital is public and private).

 

On the other hand, under certain circumstances, the investment in infrastructure is carried out under projects of Official Assistance for Development. It has been explained that depending on the type of infrastructure and the needs of its construction, one or other types of investment are usually carried out. Thus, when the objective is to quickly build an infrastructure because it is necessary, usually the investment is directly covered by public funds. However, when there are restrictions on spending, the association of public and private funds is usually a more viable option. 

 

  1. Political corruption and infrastructure spending

 

4.1. Approach to political corruption

 

Political corruption is considered one of the main obstacles to economic and social growth (Fazekas and Tóth, 2018). As a phenomenon with a dual nature (political and social), it has acquired an important dimension since the early 1990s that has led some researchers to attribute the growing interest in the subject to the discussion on the role of the state in the contemporary world. According to Rodríguez-Arana (2017), corrupt practices are deeply rooted in the national and international context and are common among both individuals and legal entities.

 

According to the UN, corruption is the main obstacle to development in the contemporary world. For this Organization, each year it is estimated that more than one trillion dollars are invested in bribes and around 5% of the world GDP is diverted for the realization of illicit payments (Rodríguez-Arana, 2017). However, these are only estimates and the total amount could be even higher. The importance of political corruption differs in the regions of Europe. While the countries of southern and eastern Europe are considered to have widespread corruption at the highest levels of government, the prevalence of corruption is considerably lower in the west and north of the continent (Polk et al., 2017).

 

When addressing the concept of corruption there are different authors who propose definitions that are conditional, all of them coincide in pointing to an element to detect it: the public procurement process (Fazekas and Tóth, 2018). The public procurement process is characterized by being highly regulated, so that it is an activity limited by the legislation of each country. This process has been connected with other concepts such as governance, having estimated that a procedure heavily involved in public procurement equates to a more impartial government (Fazekas and Tóth, 2018).

 

In this context, according to Castro et al (2018) corruption has the objective of directing the hiring towards that entity that is intended to favour, establishing mechanisms to avoid being detected by the instruments of public control that have been established.

 

The existence of corruption entails at the same time, at least, two violations of the essential principles of democracy (Cavalieri, Guccio and Rizzo, 2018):

 

- First of all, it alters the equality of opportunities by altering the competition, since it promotes the unjustified use of public resources to favour the economic agent that is expected to grant the project.

 

- On the other hand, this action of favouring an entity leads to the violation of equity in relation to information on the hiring process, since it implies offering one of the winning companies direct access to public resources, which, again, it alters the competition.

 

This unjustified conduct entails for the public administration the payment of a higher price for the projects that are promoted, and, perhaps, lower quality in the execution, since it is necessary to divert part of the budget to attend to the costs of this favour. In particular, the payment of bribes is usual for those that have propitiated the situation, which is sometimes hidden through false contracts, subcontractors of companies that are sometimes even non-existent entities, among other illicit practices. 

 

The hiring of public infrastructure represents a very high cost for the administration, so the amount that these bribes can reach is very high. Besides, it must be borne in mind that both public elites and private companies can be involved in corrupt practices, being a transversal phenomenon that causes adverse effects for society as a whole.

 

The effects of political corruption are the following:

 

- Less economic growth, and, consequently, a severe attack against the rule of law, while wasting valuable resources to sustain it.

 

- Weakens democracy: corruption endangers democracy by breaking equity in society. This circumstance can cause a loss of legitimacy of the political system, which loses credibility among citizens.

 

- Less access to services: it has been explained that, considering that corruption means diverting public funds to private channels, services that society can access, such as health or education, are affected. In turn, this is an obstacle for the public administration, since as a result its capacity to meet the demands of citizens is diminished.

 

The establishment of indicators that can alert of a risk of corrupt practices has been one of the topics that the academic literature has tried to discuss. Among these indicators, it has been expressed that one of them is the establishment of rules that alter the equity between the competition, which alter the possibilities of entering into a public tender to different companies to directly propose a proposal to the company that it will be beneficiary. However, it is not always easy to observe these indicators in practice.

 

On the other hand, the bidding process can also identify non-legal behaviour, for example the generalized presence of the same company in all public contracts during a period can alert the systematic deviation of the contracting processes towards this entity, from so that the percentage of contracts that the same company subscribes could show that there is an illegal practice.

 

In addition, it has been expressed that corruption risk can also be assessed by analysing the characteristics of the bidding process that is implemented, which, depending on the degree of freedom granted to officials to make decisions, could suggest that the possibility of benefiting certain companies is facilitated.

 

According to Rodríguez-Arana (2017), the excessive regulation of public procurement processes constitutes, in practice, an element that helps corrupt practices to materialize. For this author, the more rigorous the legal framework that limits the activity of the administration is, the easier it is to engage in illegal practices, as the regulatory excess leads to confusion that jeopardizes legal security. Consequently, an over-regulated scenario is as dangerous as the legal vacuum to lead to analogous consequences.

 

Fighting corruption requires specific training of all people who may be involved in decision-making processes, as well as the companies that intend to compete, and must be one more area of Corporate Social Responsibility. The main challenges that are highlighted in this area are reconciling the personal interest of every individual to maximize their benefits with the pursuit of the common good and acting on ethical principles that every citizen must internalize.

 

From a positive point of view, institutions are required to recover the connection with the values that public management should contain, such as ethics and the search for the public good.

 

4.2 Relation between political corruption and infrastructure spending

 

According to Tanzi and Davoodi (1998), the investment in infrastructure that public actors develop is essential to generate economic growth in societies. These authors have indicated that the relationship established between public spending and growth is linear, so that more public spending can increase GDP (Tanzi and Davoodi, 1998, Tanzi, 2004). Although this relationship has been supported by economic arguments, in practice, the decision process has been widely discussed because investing in infrastructure means that public budgets have the capital to allocate to certain processes (those related to infrastructure) and, therefore, others are discarded (such as hiring staff) (Rose-Ackerman and Palifka, 2016).

 

In this regard, according to d'Agostino, Dunne and Pieroni (2016) there is a corpus of academic literature on what is the economic impact of very little political corruption (in comparison with the number of investigations that analyse political corruption from other points of sight) despite being a subject of maximum importance. For these authors, there is a direct correlation between the cases of corruption and the lower economic development of a country, since by diverting part of the public budget into corrupt practices, opportunities are lost to invest in items that are essential to generate growth, such as education.

 

This aspect has also been analysed by Swaleheen, Ben Ali and Temimi (2019) who, with an investigation in which they examine the behaviour of more than 130 countries, concludes that the most corrupt governments establish common policies regarding the provision of public services, reflecting similar behaviour. According to the evidence reached by these authors, in countries with more corruption, less investment is made in education, although health spending is representative. In the investigation of Swaleheen, Ben Ali and Temimi (2019) it is highlighted that corrupt practices also imply a higher rate of school dropout due to the lower investment in educational policies that are carried out under these regimes.

 

In the same sense, Wong (2017) explains that political corruption alters the mechanisms of redistribution of wealth, since it implies that the elites, in charge of managing public funds, retain part of the budget, misappropriating public funds, either directly or indirectly.

 

In this way, Wong (2017) has described that political corruption can also occur through actions that, although by themselves do not suppose an illicit practice, they are, at least, contrary to the moral, for example, the establishment of client contacts with companies that break with the balance of competition by giving rise to long-term benefits.

 

The criticisms, according to Tanzi and Davoodi (1998) are even more evident in those regions/countries where the infrastructure is in good condition and, on the contrary, it is necessary to invest in other types of services. These regions/countries still take this type of investment decisions, increasing the public acts of presentation of public works that were sometimes not needed. In these events, where politicians "cut the ribbon" and show the new infrastructure, they are usually given a social guarantee about their management, while society usually approves the construction of public works as a positive aspect of the government, and, in fact, for some authors, it is clear how most active governments in the creation of public works are better seen than those that opt for rationality (Tanzi, 2004, Rose-Ackerman and Palifka, 2016).

 

It has been highlighted that the selection of infrastructure is a process that, to a large extent, is discretionary, therefore it is politicians who choose, at least in relation to those public works that will be executed in the short term, which investments will prevail during their mandate (Tanzi, 2004, White, 2015, Rose-Ackerman and Palifka, 2016). In this sense, the decision is part of a series of basic management issues that are carried out daily, without tangible differences compared to other expenditure items (Rose-Ackerman and Palifka, 2016).

 

However, in practice, selecting an infrastructure project means deciding on many more factors than deciding on other aspects, since, among other issues, it has to reflect on:

 

- The total amount/time that can be invested.

 

- How the budget will be allocated among all the elements that make up this infrastructure.

 

- The specific choice of the public work to be done, the project and its location.

 

- The size and design of the project.

 

In the decision-making process, multiple authors have pointed out that there will be external influences that need to be controlled in order to avoid arbitrary decisions or, what is even more harmful, decisions through which those who dispose, obtain a personal benefit (Mauro, 1997 White, 2015). In particular, the last two points (choice of the project and its design) are the ones that pose the most considerable difficulty due to the relationships that must necessarily be established between the public and the private.

 

In many countries, according to Tanzi and Davoodi (1998), it is very common for public actors to receive commissions, which are paid by the companies that carry out the corresponding works with the infrastructure that have been agreed upon. The situation is very worrying, while, even when the commissions represent a very low investment compared to the volume invested, they can still be very high amounts, which is a temptation for those who decide. In this sense, given that commissions are usually calculated based on the total project cost, the payment received by public actors for facilitating the operation are figures that may exceed their annual salary and give rise to the priority interest during their management to intervene so that the companies that have promised the most commissions are the ones that benefit the most (Mauro, 1997).

 

The commission, therefore, is, in reality, a bribe, an invitation to corruption. These payments have been denounced by different authors, who have highlighted that there are countries in which there is no public work that is carried out without these previous payments (Kenny, 2007).

 

The existence of these commissions gives rise to certain attitudes in the people who have to deal with the management of the processes, as well as in the companies that compete for a public tender (Rose-Ackerman and Palifka, 2016). The behaviour of both agents gives rise to the phenomenon of corruption, which can be defined in broad terms as the action aimed at seeking a personal benefit by using public goods for that purpose.

 

Although multiple acts of corruption often occur in the area of decision-making regarding infrastructure, according to Mauro (1998) this is not the only way in which corruption occurs, as other authors, such as White, (2015) or Rodan (2016) also point out that it is common for political agents who are in a very long time in power to find other ways to benefit from public funds. However, public constructions are one of the events that facilitate these actors that can benefit, since during the valuation of the infrastructure and the selection of companies, personal interests become evident, distorting the cost-benefit ratio because the public expenditure in which it is incurred is much greater than necessary (Gupta and Abed, 2002).

 

Corruption therefore implies, an alteration in the decision scenario that harms society in general, which, as a result, will suffer that public capital has deviated and has not been used efficiently, which, in the worst of these cases, there are areas of public deficit benefits that citizens suffer (Woodall, 1996, Mauro, 1997, Rock and Bonnett, 2004, Gillanders, 2014, Rose-Ackerman and Palifka, 2016). 

For Boudreaux, Nikolaev and Holcombe (2018) corruption limits economic growth, reduces the amounts that are invested in public goods and affects the trust placed in political actors.

 

The existence of corruption according to authors such as Gillanders, (2014) or Boudreaux, Nikolaev and Holcombe (2018) implies that a destructive institutional environment has been generated from which the operations that are implemented are highly pernicious for all the agents involved, and, consequently, it will mean that there are companies with more facilities than others to compete for public projects and people (those who make the decision) who obtain public resources illegitimately.

In this scenario, according to Mauro (1998) the benefits that investment in infrastructure could represent for society are blurred and are only relevant for a few (those who participate in this process), with society being the big loser, since, as a result, you will see how public services lose quality and there are unattended areas due to a lack of budgets, such as education, scientific research or medical services (Kenny, 2009, Rose-Ackerman and Palifka, 2016).

 

4.3 Public procurement in Spain

 

Public procurement is the activity through which the Administration satisfies its needs for goods and services, both for itself and for citizens. The activities carried out by the administration to hire are highly regulated, firstly because the administration, as an intangible entity, cannot perform them themselves and secondly because the administration cannot act arbitrarily, since it acts pursuing purposes of interest general.

 

In this regard, according to Rodríguez-Arana (2017), when the administration contracts, it is positioned in a differentiated role, acting as a legal entity to which correspond a network of powers that can only be argued if it is taken into account that it is destined to satisfy a series of purposes intended for society in general. For this reason, in its contractual practices it has to reflect a series of fundamental principles, embodying the values that are considered central in the social and democratic state of law in which the contracts will be executed, which translates into the incorporation of certain clauses into the contracts that are destined to collect the protection of the social interest as a premise.

 

In Spain, due to the promotion of community law, contractual practices have been significantly transformed, since, with the transposition of “Community Law Directives” the national regulatory framework has been adapted to harmonize legislation, which has led to the fact that since 9 March 2018, Law 9/2017, of November 8, on Public Sector Contracts entered into force, in which the European Parliament and Council Directives 2014/23/EU and 2014/24/EU, of February 26, 2014 are transposed into Spanish law, essential rule in the matter that replaces Royal Legislative Decree 3/2011, of November 14, which approves the Consolidated Text of Contracts of the Public Sector.

 

 

         5. Political ideology and corruption

 

5.1 Political ideology

 

Ideology is a set of ideas or thoughts of a person or a group of individuals. Ideology can be linked to political, economic and social actions.

 

 There is no single definition of the term ideology. The concept of ideology can take various forms; as a political belief system or world view of a particular social group, as the ideas of a ruling class that propagate a falsification of reality or even a systematic set of political ideas that reads with theories that assume the form of participation and political commitment. This term can also be associated with political, economic and social actions and is commonly taken by the sense of masking social reality.

 

The term ideology was used in a way by the philosopher Antoine Destutt de Tracy to evoke the science that studies ideas and the relationships between parties that express them. Ideology tends to conserve or transform the existing social, economic, political or cultural system.

 

It has two main characteristics: it is a representation of society and presents a political program. Therefore, it reflects on how society as a whole operates and, on this basis, formulates an action plan to address and comply with what we consider to be the ideal society. The notion of ideology resembles the one of the worldview (Weltanschauung), although it refers, in addition to an entire culture, to a particular individual (which is not through ideology, since no ideology belongs to a single person).

 

5.2 Ideology and corruption

 

In Europe, according to Rodríguez-Arana (2017), three out of every four citizens are sure that corruption is widespread and conceive it as a mechanism of the administration itself. Indeed, for this large percentage of citizens, it is clear that this is a habitual behaviour of the public authorities, which try to act to achieve their own interests instead of governing for all.

 

In Spain, this percentage increases, and 95% of citizens consider that corruption is the most prototypical feature of public action, a percentage that rises to 97% in Italy and reaches 99% in Greece. According to Charron and Bågenholm (2016), one aspect that can be asked is why citizens continue to vote for the same political parties that have developed corrupt practices, which can be expressed in ideological terms. In this sense, Charron and Bågenholm (2016) have explained that citizens cast their vote for ideological reasons and, due to this circumstance, do not take into account the influence of corruption on public management.

 

On the other hand, according to Rodríguez-Arana (2017), in recent years the number of corruption cases in Spain has increased dramatically due to the difficulties of political parties to finance themselves, which have led them to accept that companies inject capital into them intending to receive a posteriori consideration. In addition, in connection with this financing technique, administrative discretion has increased, particularly in public procurement. More specifically, we have to consider that policy unfolds in an economic environment in which there are positive returns in the hands of entrepreneurs, who need "collaborators" to develop their projects. These collaborators, make up the political system, from which they can benefit both directly (promoting projects that generate economic returns) and indirectly (establishing a favourable tax environment). The political competition that exists between the different parties becomes, therefore, a process that will give the victory, after the elections, to those agents that facilitate the obtaining of the economic results that the businessmen pursue.

These businessmen usually support those parties that can most closely approximate their interests, therefore, the electoral campaign is stirred by particular interest of the companies that influence in order to obtain the benefits that they individually pursue, and, therefore, move away from the common good, which takes a back seat (De Vries and Solaz, 2017).

 

These circumstances give rise to a very worrisome scenario that is characterized by giving rise to a scenario in which corruption deeply penetrates and becomes an unstoppable practice, while the public administration, instead of focusing on the public interest, is oriented towards the private interests that embody those who financed the rise to power of their leaders. According to Rodríguez-Arana (2017), allowing political parties to be financed with private resources from companies encourages a scenario prone to corrupt practices, because those who support political elites will sooner or later demand that their investment be recovered, with the consequent impairment to the public finances that derives from it.

 

According to Burlacu (2018) in the most corrupt systems, ideology tends to take a back seat and voters are not influenced by it, because they face a latent difficulty: identifying what the ideological positioning of the parties that participate in the campaign is. In addition, for Burlacu (2018) the second effect of a high corruption level seen by voters is the difficulty they have to trust the ability of the parties to carry out the electoral program they defend. In this way, more corruption means less capacity to manage public administration and, consequently, less commitment to the development of measures that have a positive impact on society. This perception leads voters to move away from the ideological vote and try to vote for that party that can offer better management, ignoring the weight of ideology in this decision (Burlacu, 2014, Burlacu, 2018).

 

In this context, the first consequences will be noticed on public procurement, being able to observe from the concession of public services to the acquisition of any services, and, of course, urban planning.

 

The control mechanisms that intervene to prevent corruption in this environment are challenging to operate in the right direction, given that those who are responsible for their supervision are the first ones interested in their failure to benefit part of the system.

 

In this way, it becomes clear that the real obstacles to corruption become part of a mechanism that is activated to legitimize corrupt practices, which turns the public administration into a discretional system that moves away from democracy and of justice.

 

On the other hand, according to Riera et al. (2013) in Spain, significant electoral consequences for corrupt parties have not been reflected. Therefore the loss of support they receive as a result of these practices is not relevant enough to become a deterrent. In this regard, according to Riera et al. (2013), in Spain, voters prefer to preserve their ideological closeness with the party in government instead of opting for parties which are not accused of corruption, therefore offering a greater weight to the ideological factor in contrast to the importance they attach to corruption. De Vries and Solaz (2017) document that, although one would expect corruption to be punishable by democracy, voters tend to "understand" corruption in order to avoid shifting their vote to another ideological current with which they do not they identify themselves. However, these results are not equivalent in all countries; there are democracies in which the vote is used as a mechanism to sanction mismanagement, corruption or the economic situation (Shabad and Slomczynski, 2011).

 

The investigation of Shabad and Slomczynski (2011) shows how the vote shifts between the different parties, based on the management results achieved during the legislature, which, according to these findings, supports that there is a preference to aspects linked to the performance achieved during said period to the detriment of the ideological connection. In this sense, as argued by these authors, elections can function as a mechanism of accountability in democracy, which only works when citizens conceive that they have the responsibility to transform the system and, consequently, vote to mobilize the government in favour of the practices that they consider legitimate. This research, in which the analysis scenario is Poland, reveals that there may be underlying sociological factors that explain in the first instance whether the ideology or management is prioritized and, secondly, that these factors can transform the governance scenario that is raised, as Xezonakis, Kosmidis and Dahlberg (2016) have also stated.

 

In this context, Xezonakis, Kosmidis and Dahlberg (2016) indicate that the weight that individuals give to corruption is structured by the concept they have of it, which can amount to "transgression of the law" or "favouritism". This subjective perception is mediated by the ideology of the citizens and depending on the personal judgment that is possessed, illegal activities are judged in one way or another, which gives rise to the support of a party or not. For this reason, as these authors explain, ideology determines the perception of corruption, its severity and, consequently, motivates a certain candidate to be supported or not.

 

In the same sense, Konstantinidis and Xezonakis (2013) have recognized that elections are a scenario of opportunity for citizens to punish the corrupt, or not, based on their ideals. However, the search for collective benefits that the system is presumed to provide implies for the voters the need to assume corruption as a necessary cost, given the belief that it is an inevitable practice within the democratic system. Ceron and Mainenti (2018), Bauhr and Charron (2018) or Pavão (2018) have also supported the idea that there are structural arguments that explain the vote and the subsistence of corruption as one more variable that has been assumed within the democratic system as "part of the rules". Indeed, although democratic accountability is expected to reduce corruption, citizens surprisingly choose to renounce their right to protest and express their grievances, and to abstain from using their electoral right to punish corrupt politicians (Bauhr and Charron, 2018).

 

In this regard, Pavão (2018) has shown that voters consider that corruption is difficult to avoid for politicians and that it is an integral aspect of the system. Furthermore, the more corrupt a political scenario is, according to Pavão (2018), the weaker citizens feel to change this situation with their vote, therefore, in practice, "punish" less corrupt politicians with their vote. 

 

Widespread corruption consequently increases loyalty to corrupt politicians, demobilizes citizenship and creates a deep division between those who have access to information, or potential beneficiaries of the system, and those who do not hold this position and therefore, are excluded from the distribution of benefits (Bauhr and Charron, 2018). This explains why those who are not favoured by corruption do not channel their discontent towards effective electoral punishment and, therefore, how corruption undermines democratic accountability (Bauhr and Charron, 2018). In this context, according to Choi and Woo (2010) the vote of punishment will only take place when, because of corruption, the system cannot offer citizens a sufficient standard of living.

 

In this way, only when economic growth slows down will corruption be fought, and, in the rest of the cases, corruption will not be a factor that influences the electoral results, regardless of whether it is perceived or the level concern that it generates, since the economy is considered as a more critical issue by citizens than corruption (Choi and Woo, 2010).

 

 

Methodology

 

The research methodology is designed to respond to the objectives that have been presented above. In the first place, the starting point has been placed in a literature review on the influence of ideology and the role of corruption in public management, referring to the political parties financing characteristics. Here, we appreciated the existing interference of the private sector, which usually provides capital as a method to subsequently obtain benefits, which are represented, among other situations, by the hiring of public works outside the legal requirements.

 

This is a key aspect, insofar as it is emphasized that the private agents who urge corruption, participate (and control) along with the political parties, influencing management decisions. The costs of corruption are transferred at the same time to all the vertices of society, in very different ways: with a higher contract price, with inferior quality for the projects that are executed and, in the most severe cases, with contracting of public works that are not necessary or subsequently used. The public good, towards which the management of the administration must orient itself, is affected by these decisions.

 

  • Corruption is widespread, especially in developing and transition countries; however, there are significant differences between and within the regions.
  • Corruption increases transaction costs and creates insecurity in the economy.
  • Corruption usually leads to inefficient economic results and in the long term reduces foreign and domestic investments.
  • Corruption is unfair, since it imposes a regressive tax, which entails large burdens in particular on commercial activities and services carried out by small businesses.
  • Corruption destroys the state’s legitimacy.

 

Many other researchers and institutions (the World Bank Institute, the European Commission or the United Nations) have investigated corruption and its impact on macroeconomic and microeconomic indicators through various forms of corruption.

Most studies are, therefore, the analysis of corruption effects on various economic indicators, such as GDP growth, investment, employment, tax revenues and foreign investment, or the study of various forms of corruption, the relationship with politics and the economic environment, the investigation of their social condition and their various manifestations. Starting from the fact that it produces adverse effects, we must understand that corruption is not a weakness of people but institutions (both supervisors and others) since they should avoid it. 

 

 

Below, an analysis of the corruption cases in Spain is made. These are represented by the contracting of public works and will be classified according to the ideological current of the party in power that has made the decision. In addition, they will be classified according to the administrative level to which the case has been perpetrated (local, autonomous or state administration).

 

Through case studies, these scenarios will be compared, using the methodology that has been previously implemented by research such as Locatelli’s (2015), extrapolating them to this scenario. Through the case study, three elements come together:

 

- The study of the context in which the project is implemented.

 

- The longitudinal perspective on the life cycle and the contract characteristics, alluding to the irregularities.

 

- The transversal vision of how the project causes negative effects on society.

 

As information sources, we will use both news and information from judicial processes and research developed in the Spanish context.

 

Given the widespread nature of corruption in Spain, it is difficult to determine the existence of a common procedure in cases of corruption. However, certain interesting similarities are identified and allow to simplify some characteristics:

 

 

  • The actors: In most of the analyzed examples, there is the figure of an intellectual brain that tends to be the link in the entire scheme of corruption (Provincial Court of Malaga, 2013, Supreme Court, 2012). The figure of a general organizer of the whole corruption scheme provides a hierarchy and a centralized structure, where a person has the power and enough contacts to coordinate the project, at least during the early stages of the corruption scheme. This is the person who maintains contact with the executives of the companies involved in the corruption network and also with public officials, who have sufficient power to distort the regulations applicable to the contracting of these projects. Other relevant actors observed in all cases are the intermediaries, who are in charge of carrying out all the necessary manipulation so that the operations have a legal appearance. Because there are many companies involved in the different cases of corruption, cooperation is an essential requirement to ensure that contracts always remain within the ring of corruption. In Spain, 71% of the companies which were surveyed in the Eurobarometer of 2013, considered that bidding under the parameters of corruption was widespread in Spanish public procurement and consider that the legislation favours these corrupt practices by being inefficient. 
  • Legislation: the Spanish legal system has advocated a heteronomous system against tender manipulation. This system is based on the fact that the non-winning competitors (those to whom the project is not awarded) are those who have the capacity to denounce these anti-competitive behaviours to the competition authority, which carries out the contracting control activity. The entity is limited to the procurement procedure, so it cannot supervise other tasks performed outside the contracting processes, such as agreements between bidders. In a report by the National Competition Commission (Comisión Nacional de Competencia, 2011), bid manipulation is defined as the most common illegal collusive behavior among bidders, which takes place during the acquisition process and includes practices such as fixing prices, the division of the market or agreeing on any other commercial condition, to maximize the profits of a public auction. They also state that when the bidding is carried out in public procurement, the prices of goods and services purchased by the public sector can increase up to 20%.
  • The practices and procedures: The standard procedure of corrupt public procurement is to award a contract to a company in the corrupt network for a value that is usually higher than what this project would achieve in a competitive market. In return, the manager of the company to which the project is assigned in a corrupt manner, offers a bribe to the public official or officials who have collaborated in the manipulation of the hiring process. Another common procedure used in detected cases of corruption in Spain is that of companies that make a relatively low offer in a specific offer when other companies compete, in order to guarantee that the interested company wins the public tender. By doing so, companies ensure that they can overload the project, inflating its price once the contract is awarded, without the government imposing significant objections, which will result in both parties benefiting from this strategy. Through previous conversations, public officials and managers agree to manipulate one or more stages of the acquisition process illegally. By doing so, they guarantee that one or more of the companies will receive public funds financing, reducing competition and harming the welfare of the citizens and other companies that could have been the project winners. In a report of the Court of Auditors (Court of Accounts, 2012), the irregularities that most often take place in Spain are listed, these are the following:
  1. The division of total contracting into smaller contracts.
  2. The use of a not fully justified emergency procedure.
  3. The practice of irregularities in the selective criteria.
  4. Poor motivation for the contract award.
  5. Contracts modification without cause.
  6. The allegation of unjustified exceptions so as not to give information about the offers.

 

 

  • Bribery: this is the price that is paid to the public official in exchange of favouring the companies that win the public bidding projects. In Spain, the most frequently detected bribes have been paid in the form of goods (cash, automobiles, luxury items, etc.) (Provincial Court of Malaga, 2013, Supreme Court, 2012), but also in the form of services: subcontracting of proposed companies, job offers for the public official or the people that make up his personal circle (Superior Court of Justice of the Balearic Islands, 2013).

 

 

Corruption cases will be summarised in table 1. In Spain, cases of corruption are generally pervasive and complex (involving a large number of people and articulated through very different channels through which the parties achieve their objectives. The most notorious cases have been selected for this investigation, on which a brief description of these events that have taken place in Spanish public procurement is made.

 

The selection of the cases described in this document is made in accordance with the importance of the people and the amount involved in the case or the political consequences of the corruption network that has been dismantled.

 

Table 1. Identified corruption cases.

 

Infrastructure type

Name

Public investment (in euros)

Party that promotes them

Airport

Ciudad Real Central Airport

1,100 million euros

PSOE

Airport

Castellón Airport

150 million euros

PP

Airport

Lerida Airport

40 million euros

PSC

Airport

Burgos Airport

45 million euros

PSOE

Conference and Exhibition Centre

International Convention Center of the City of Madrid

190 million euros

PP-PSOE

Conference and Exhibition Centre

Conference and Exhibition Centre of Oviedo

350 million euros

PP

Townhall

Madrid City Hall (Palacio Cibeles)

530 million euros

PP

Culture

City of Culture Galicia

400 million euros

PP

Culture

City of the Circus in Alcorcón

120 million

PSOE

Trams and stations

Jerez Tream

168 million euros

PSOE

Trams and stations

Metropolitan Tram of the Bay of Cádiz

224 million

PSOE

Trams and stations

Zaragoza tram

400 million euros

PSOE

Trams and stations

Jaen Tram

120 million euros

PSOE

Trams and stations

Parla Tram

130 million euros

PP

Trams and stations

Utiel – Requena AVE Station

12 million euros

PSOE

Trams and stations

Santa Rosa de Barcelona Metro station

32 million euros

PSC

Hospital

Central University Hospital of Asturias (HUCA)

1,300  million euros

PP

Source: own elaboration from different sources.

 

 

There are four main ways in which public money has been wasted: corruption, underutilised projects, useless projects and inadequate prioritisation.

 

On the other hand, synthesis has been made about the most frequent ways of articulating corruption schemes in Spain (see table 2). It must be taken into account that in order to construct this information, the data referred to in judicial reports and investigations carried out by the Court of Accounts have been considered.

 

Corruption strategy

Description of the strategy

Investigated Case

Division of contracting in minor contracts.

The hiring control is avoided through the performance of different hiring processes of a smaller amount.

Caso Gürtel (Audiencia

Nacional, 2014)

A procedure is processed as urgent a when it is not.

Not enough data has been provided to prove that it was necessary to hire through the emergency route.

Caso Palma Arena (Audiencia Provincial de

Palma de Mallorca,

2012)

Application with irregularity in the selection criteria

Eligibility criteria are adapted to benefit one of the companies that are competing in the contest. Altered channels are used in the contracting process to favour some entities.

Caso Gürtel (Audiencia

Nacional, 2014)

Unjustified hiring (the selection is not motivated)

The hiring has been partial because no justifications have been provided for the selection. In addition, we cannot certify that the rules have been met.

Caso Malaya (Audiencia

Provincial de Málaga,

2013)

Unjustified modification of the contract conditions.

The conditions for the hiring have been altered without there being a justification (for example, the dates of execution are changed, the decisions that are made on it, it is subcontracted, etc.).

Recurso 1/2012,

Resolución 11/2012

(TARCJA, 2012)

The reasons for not publicising the hiring have not been justified

By avoiding advertising, the contracting entity

reduces competition and transparency,

eliminating the possibilities for other unwanted companies to compete.

Informe Anual (Tribunal

de Cuentas, 2012)

The negotiation is abused without publicity

Negotiating without advertising prevents the participation of companies which they do not want to hire, avoiding the existence of fair competition.

Informe Anual (Tribunal

de Cuentas, 2012)

Source: own elaboration from different sources.

 

Discussion

 

Below, we intend to answer the research questions asked.

 

• Does political ideology influence the selection of infrastructure?

 

According to the research that has been carried out, there is no connection between the political ideology and the selection of the infrastructure, or, in other words, the selection of the infrastructure is not made by the influence of said variable. However, the party in power at a certain time does influence at the administrative level at which the decision is made. This circumstance can be accredited if each episode of corruption analysed is observed in detail, in which, although most are attributable to the PP (conservative) followed by the PSOE (socialist) and the PSC (Catalan Socialists) can be explained attending to who governs in each of these parties. 

 

Public infrastructure projects are driven by public capital that is managed by the parties in power, which articulate the necessary mechanisms to achieve the objectives they pursue. The ideology, in addition, does not condition if one type of financing or another is chosen. The high-speed rail system, known as AVE, alone has inadequate allocations of public money in the range of € 26.2 billion during the period 1995-2016, according to a report called "Approach to the Geography of waste of economic resources in Spain: balance of the last two decades", a joint project of the universities of Barcelona, Girona, Valencia, Cantabria, Tenerife, Seville, Malaga, Alicante and the Complutense University of Madrid . The report says that between 1985 and 1995, the Spanish authorities squandered the equivalent of 5% of gross domestic product (GDP). Later, during the economic boom of 1996 to 2007, this figure shot up to 20% of GDP. From the beginning of the economic crisis until now, it has been reduced to around 3%.

 

Of all the unnecessary expenses, more than a third have entered the AVE railway system for projects that did not produce the kind of social benefits expected from such investments. There were "too many multi-million dollar train stations, closed lines, stretches that were abandoned in the middle of construction, unnecessary lines and cost overruns."

 

"Everything was done without an adequate cost/benefit analysis, and often based on estimates of future users or profits backed by a scenario of economic euphoria that was as evident as fleeting," the report adds. After the high-speed train, airports and seaports are other important recipients of excessive government funds (9.5 billion euros). The report finds that "a simple look" at the official data provided by AENA, the national airport operator, clearly shows that at least a third of its airports are unnecessary.

 

We should also take into account all the airline facilities built by regional governments "following no criteria other than attracting votes; these facilities are now closed, without passengers or with such a small number of them that they will remain red for decades. " The airport of Castellón, in the region of Valencia, is a good example.

 

As for the seaports, the most significant example of wasteful spending is the port of A Coruña, in Galicia. The desalination plants are a chapter in themselves, representing more than 2,300 million euros in expenses, inefficiencies or mismanagement in places like Torrevieja, Alicante, Oropesa and Moncofar. The excessive spending on roads has reached 5,900 million euros, according to the report. Of this amount, almost 5,000 million euros have gone to the almost deserted "radial/arterial" roads outside Madrid, which had to be rescued by the state.

 

Regional and local governments have also squandered € 34.6 billion on unnecessary educational centres, hospitals, cultural and scientific facilities, parks and important events. The list of large spenders is headed by the regional governments of Catalonia (9,100 million euros), Madrid (7,700 million euros) and Valencia (5,900 million euros).

 

At a local level, the report mentions unnecessary projects such as tram lines in Parla, Jaén and Vélez-Málaga; the City of the Environment in Soria, the City of Light in Alicante, the City of Justice in Madrid, the City of Arts and Sciences in Valencia and the Alicante Terra Mitica theme park.

 

Researchers highlighted the excessive costs in the AVE lines that connect Madrid, Barcelona and the French border (more than € 8.9 billion) and in the Pajares Tunnel (€ 3.5 billion).

 

 

• Are investment projects in infrastructure used as electoral weapons?

 

Corruption is a constant in society and occurs in all civilisations; however, only in the last 20 years has this phenomenon begun to be seriously explored. It has many different forms, as well as many different effects, both in the economy and in society in general. Among the most common causes of corruption are the political and economic environment, professional ethics and morals and, of course, habits, customs, tradition and demography. Its effects on the economy (and on society in general) are well researched, but not yet completely.

 

Corruption, therefore, inhibits economic growth and affects commercial operations, employment and investments. It also reduces tax revenues and the effectiveness of various financial assistance programs. Society, in general, is influenced by a high degree of corruption in terms of reduced trust in the rule of law, education and, consequently, the quality of life (access to infrastructure, medical care). There is also no straightforward answer on how to deal with corruption.

 

• How is decision making made and in what processes can political ideology influence each phase?

 

Construction, public works and infrastructure is a complex issue, since it can be the responsibility of a Ministry in its own rights, such as the Ministry of Public Works, or a Ministry that deals with public-private partnerships. It can be an important part of other ministries, such as within the Ministries of Transportation or Energy. Alternatively, large projects may be separated from the government as Public-Private Partnerships or placed under the supervision of a National Agency for Major Projects. Many corruption problems arise at this 'ministerial level'. At the same time, individual projects can be massive, sometimes larger than the GDP of a whole country, with immense complexities. Therefore, there is another block of corruption problems at this project level.

 

The political and economic environment strongly influences the phenomenon of corruption. The more regulated and limited the economic activity in the country, the greater the authority and power of the officials in decision making and the greater the possibility of corruption, since people are willing to pay or offer payments to avoid restrictions. There is great potential for corruption, especially where officials are under regulation, given the opportunity to decide based on discretion.

 

The level of corruption is also affected by monetary policy. There is a strong link between monetary policy and the fraudulent activity of institutions. Thus, in States where there is a well-regulated financial sector, with no informal economy and no black market, they is less corruption than in those in which the opposite occurs. They also find that there is less corruption in countries with greater economic and political freedom.

 

The level of efficiency of the public administration determines to what extent corruption can be installed in society. This efficiency is determined by the quality of regulations and permits, since ineffective and unclear regulations help to increase the level of corruption in at least two different ways:

 

  • The artificially created power monopoly that allows public officials to obtain bribes is based on their superior position and is integrated into the system.
  • On the other hand, however, ineffective and unclear regulations cause inhibition and, therefore, encourage people to pay bribes to speed up bureaucratic procedures.

 

Corruption is also strongly influenced by the low salaries of public administration employees, who, therefore, try to improve their financial situation by receiving bribes and, consequently, the socioeconomic situation of government officials also affects the phenomenon of corruption. In this sense, it has been explained that corruption arises because agencies, institutions and the government can no longer control it effectively, since officials participate in these practices. In addition, corruption in public administration is also influenced by loyalty, which generally prevails over professional standards. The more dissatisfied the officials are with their work or place of work, the greater the degree of corruption.

 

Conclusions

 

Corruption is the violation of established rules with objectives that are far from public ends, benefiting private actors. Corrupt practices, such as bribes, embezzlement and fraud, which may occur in each phase of a construction project, are firmly installed in Spain, as has been recorded in this work.

 

The implementation of mechanisms through which increased accountability could contribute to reduce corruption in the provision of public services and improve efficiency in public procurement of infrastructure.

 

Spain has squandered more than 97 billion euros on 'unnecessary' infrastructure projects. Some of the useless projects undertaken are not unused airports, museums, desalination plants or deserted toll roads. The AVE railway network, which includes several lines now defunct, represents alone, 26.2 billion euros of bad investments. Another 16 billion euros will have been wasted once the promised amounts are taken into account. The waste of the regional authorities amounted to 34,600 million euros of the total, much of what was spent in parks, hospitals, cultural centres and events.

The list of large spenders is headed by the regional governments of Catalonia (9,100 million euros), Madrid (7,700 million euros), Valencia (5,900 million euros) and Andalusia (2,700 million euros). While Spanish governments spent the equivalent of 5% of gross domestic product (GDP) between 1985 and 1995, this figure rose to 20% of GDP from 1996 to 2007.

 

Since the beginning of the economic crisis until 2016, it has been reduced to around 3%. Among the highlighted projects for the review are the Castellón airport, the tram lines in Vélez Málaga and Jaén and the Pedrizas toll road, north of Málaga.

 

Nearly 5,000 million euros sank on almost deserted toll roads outside Madrid, which had to be rescued by the state. Numerous desalination plants, particularly around Alicante, accounted for more than 2.3 billion in "cost overruns, inefficiencies or mismanagement."

 

The City of the Environment in Soria, the City of Light in Alicante, the City of Justice in Madrid, the City of Arts and Sciences in Valencia and the theme park in Alicante, Terra Mitica, were labelled as "unnecessary projects".

 

Although a third of the country's airports are unnecessary, and many were 'built to attract votes', the most significant waste, no doubt, occurred in AVE rail projects that did not produce the kind of expected social benefits.

 

There were "too many multi-million dollar train stations, closed lines, sections that were abandoned in the middle of construction, unnecessary lines and cost overruns," according to the report.

 

"It was done without an adequate cost/benefit analysis, and often based on estimates of future users or profits supported by a scenario of economic euphoria that was as evident as fleeting," the report adds.

 

The researchers highlighted the excessive costs in the AVE lines that connect Madrid, Barcelona and the French border (more than € 8.9 billion) and in the Pajares Tunnel (€ 3.5 billion).

 

 

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