Assessing the Institutional- and Project-Level Determinants of Corruption in Infrastructure Projects: Evidence from World Bank–Funded Projects

Abstract

To successfully deliver infrastructure projects, it is essential to prevent corruption—i.e., the act of offering, giving, receiving, or soliciting anything of value, directly or indirectly, with the intention of improperly influencing the actions of another party in the procurement of financed projects. However, there is little to no research exploring the institutional- and project-level determinants of corruption in infrastructure projects. To fill this gap, this research develops a conceptual model that shows the effects of contract size, repeat winners, and public sector corruption on project corruption. Using data collected from the World Bank and Varieties of Democracy (V-Dem) database, 330 projects located in 61 countries between 2000 and 2018 were analyzed using multilevel logistic regression models. The results show the average contract size and the number of repeat winners in a project are important determinants of corruption risk in infrastructure projects. Higher levels of corruption in the public sector also significantly magnify the likelihood that increases in contract value will result in project corruption. This research deepens our understanding of corruption in infrastructure projects across diverse institutional environments and shows project managers and policymakers how different project characteristics influence the likelihood of corruption occurring in these localized settings.