Transparency Reforms and the Allocation of Public Funds

This project combines expertise, datasets and state-of-the-art knowledge at KU Leuven and the Charles University in order to pursue research that promotes transparency and political accountability in the relationship between corporations and the public sector. As public expenditure represents a large share of the European economies – public procurement contracts alone account for about 14 % of GDP of the EU member states – the topic is highly relevant for the European society. There are two related objectives. First, we assess the advantage that corporations obtain by implementing non-transparent ownership structures. We do so by analysing the recent transparency-improving measures, tracking the affected corporations and their activity following the reforms. Exploiting novel data sources, we examine the effect of changes in these two areas on various corporate outcomes: ownership structure, success rates in public procurement and subsidies at both the EU and national levels, use of offshore subsidiaries and location of reported profits, and basic balance sheet indicators such as profit, taxes, and debt. Second, we build on the mounting evidence that politically connected corporations enjoy significant benefits in how they are treated by the public sector, and exploit recent regulations and changes in political landscapes to find how they affect connected firms.The project consortium intends to exploit innovative data covering the whole European Union to tackle ground-breaking research questions and pilot the collaboration such that it can leverage the efforts towards future Horizon Europe applications and other international competitive grants. The proposed research efforts and data analysis will feed the proposals, and result in high quality applications.

Keywords:Political accountability, public resources, public procurement contracts, EU subsidies, transparency

Disciplines:Public economics