Ferenc Szucs

I am a PhD candidate in Economics at UC Berkeley. My primary research field is political economy, focusing on corruption and the role of media in governmental accountability. My secondary fields are public economics and development economics.

You can download my CV here.

Email: ferencszucs@econ.berkeley.edu

Job Market Paper

Discretion and Corruption in Public Procurement

This paper investigates the determinants and consequences of increasing a buyer's discretion in public procurement. I study the role of discretion in the context of a Hungarian policy reform which removed the obligation of using an open auction for contracts under a certain anticipated value. Below this threshold buyers can use an alternative "high-discretion" procedure to purchase goods and services. At the threshold, I document large discontinuities in procurement outcomes, but I also find a discontinuity in the density of anticipated contract value, indicating that public agencies set contract values strategically to avoid auctions. I exploit the time variation of the policy reform to estimate the effects of increased discretion and find that discretion increases the price of contracts and decreases the productivity of contractors. I use a structural model to identify discretion's impact on rents from corruption and to simulate the effect of alternative value thresholds. I find that the actual threshold redistributes about 2 percent of the total contract value from taxpayers to firms and decreases the average productivity of contractors by approximately 1.6 percent. My simulations suggest that the optimal threshold would be about a third of the actual.

Working paper

Media Capture through Favor Exchange (with Adam Szeidl)

We establish three results about favoritism in the Hungarian media. (1) We document distortive two-way favors between politicians and the media, in the form of government advertising and media coverage. For both directions of favors, our empirical strategy is to compare the allocations of actors with changing versus unchanging connection status. We interpret our findings as media capture. (2) We document an organizational change in favoritism: a first phase when favored media was controlled by a single connected investor; a second phase when this relationship broke down and two-way favors were terminated; and a third phase when control of newly favored media was divided between multiple connected investors. (3) We develop and implement a portable structural approach to measure the economic cost of misallocative favoritism.

Work in progress

What's going on in the smoke-filled room? Political Motives in the Monopolization of Hungarian Tobacco Shops

I present evidence on political motivations behind the monopolization of tobacco retail market in Hungary. I show that local politicians aligned with the government had a higher chance to obtain tobacco licenses than their opposition counterparts. To rule out productivity explanations, I compare this premium to a non-regulated benchmark. I also provide evidence on the importance of mayors in mobilizing voters for parliamentary elections. These two results together suggest that favor exchange exists between central and local politicians, where the central government creates rents for its local supporters to incentivize campaigning efforts.

Welfare costs of misallocating government contracts (with Miklos Koren, Adam Szeidl, and Balazs Vedres)