Public Procurement's Long COVID: Emergency Responses and Shifting Corruption Risks in Europe

The COVID-19 pandemic caused an unprecedented surge in spending to combat the pandemic with widespread accusations of corruption. The magnitude, drivers, and trajectory of corruption across the pandemic response remain underexplored. This paper approximates the impacts of the pandemic on public procurement corruption risks and the mechanisms underpinning their persistence and diffusion. Administrative data on all high-value, regulated government tenders across Europe from 2016 to 2023 are analyzed. Fixed-effects regressions on the contract level estimate the impact of the pandemic-induced spending shock on corruption risks. We find that the COVID-19 spending surge was followed by sustained increases in corruption risks, particularly in medium-integrity countries. This is largely driven by market entrants without COVID-19-product experience exploiting weaker pandemic corruption controls to secure large contracts. We also find small spillover effects from corruption risks in COVID-19-related products to healthcare and wider procurement markets, driven by buyers normalizing emergency procurement practices beyond emergency contracts.