Research on fraudulent, corrupt and collusive practices in infrastructure projects

Based on the existing research, fraud, corrupt and collusion are serious impediments for infrastructure development. To explain the reasons of fraudulent, corrupt and collusive practices, this paper proposes that the effects of control of corruption (CC) and regulatory quality (RQ). We collected total 146 sanctioned and normal infrastructure projects from World Bank Projects and Operations database and searched the control of corruption and regulatory quality scores of different counties from World Governance Indicators. Logistic regression model is applied in this paper to test the correlation between fraudulent, corrupt and collusive practices and CC and RQ. Based on the regression results, this paper presents that the control of corruption and regulatory quality are both negatively related with fraudulent, corrupt and collusive practices. Besides, the effect of interaction between control of corruption and regulatory quality on fraudulent, corrupt and collusive practices is positive. In other words, the worse control of corruption and regulatory quality results in the higher possibility to cause fraudulent, corrupt and collusive practices. Also, the worse regulatory quality will aggravate control of corruption obviously. This research provides suggestions to World Bank Group (WBG) and other similar organizations that more supervision and investigation is necessary for the firms/individuals with higher possibility of fraudulent, corrupt or collusive practices in infrastructure projects.