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Weekly economics seminar

The weekly seminar on economics of the Technical Management of the Banco de la República is a space in which national and foreign researchers present their recent work in all areas of economics and finance. It is an academic scenario in which new methodologies and economic and financial models are communicated and their policy implications are debated for Colombia and countries in the region. This seminar normally takes place every Wednesday, between February and November of each year, from 12:00 to 2:00 pm at the premises of the Banco de la República de Bogotá. On this page you can find a monthly seminar schedule. Researchers interested in participating as presenters in our seminar, are welcome to postulate their work through this portal.

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Seminario 506. The power of money. The consequences of electing a donor-funded politician

Wednesday, 24 January 2018 - 12:00pm to 2:00pm
Bogotá, Colombia
Nelson Ruiz Guarín
  • PhD candidate, London School of Economics and Political Science 


Entrada libre. Indispensable inscribirse en el siguiente vínculo: Inscripciones

Hora: 12:00 m. (refrigerio) y 12:30 p. m. (inicio del seminario)
Tiempo de exposición: 12:30 p. m. a 2:00 p. m.
Lugar: Banco de la República, carrera 7 # 14-78, piso 13 (Sala de prensa), Bogotá D.C.
Idioma de la exposición: Español


Resumen del documento:  Do donor-funded politicians benefit donors disproportionately? This paper examines the impact of electing donor-funded politicians using a novel dataset that uniquely links campaign donors and recipients of public contracts during a mayor's incumbency period in Colombia. Using a regression discontinuity design (RDD) that compares close elections between politicians who received campaign donations and those who did not, I find that electing a politician who received donations more than doubles the probability of donors receiving contracts from a mean of 5.9% to 15.5%. The benefits to the donors of the donor-funded politician are significant: on average total contracts received is 13.75 times the value of their donations. From a social welfare point of view, electing a donor-funded politician does not affect local government deficits and it has no impact on investment, however they are more likely to have disciplinary sanctions against them and investigations related to public procurement. Moreover contracts for donors have a short duration, have an inflated value compared to similar contracts for non-donors, and tend to be given under a minimum value threshold modality, in which there is less screening and lower chances of competitors bidding for contracts. In order to isolate the effect of donor money from other personal characteristics associated with being donor funded, I employ a fuzzy RDD approach that uses arbitrary campaign limits as an instrument for the candidates’ proportion of donor funds. Results indicate that looser campaign limits lead to more participation of donor funding in campaigns, and as a result reduce the effect of favoring donors with contracts. This paper shows evidence that political selection of donor-funded candidates can have repercussion in public procurement, and that campaign limits can limit the influence of money in politics.

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