The document discusses Dr. Vuk Vuković's research on corruption and re-election in Croatian local government, highlighting how personal connections between politicians and rent-seeking firms allow corruption to thrive while maintaining electoral success. It emphasizes the importance of full budget transparency to combat corruption, detailing a web-based search engine developed for the city of Bjelovar that provides public access to government financial transactions. The goal is to enhance public accountability and citizen engagement in local governance, thereby reducing fraudulent activities and nepotism associated with political patronage.

1. USING DATA TO FIGHT
CORRUPTION
Full budget transparency in local government
Dr.sc. VUK VUKOVIĆ
Oraclum Intelligence Systems

2. My Oxford PhD research:
Corruption and re-election
Personal connections and mutual dependence between rent-seeking firms and
the political establishment enables politicians to engage in corruption and still
win elections
There is a limit to corruption: when a mayor surpasses the cutoff level of 20%
of corruptly allocated funds from public procurement probability of re-
election declines (at 50% he or she loses the election)
Vukovic (2019): Corruption and re-election: How much can politicians steal without getting punished? Journal of Comparative Economics

3. Corruption and re-election

4. How do I measure corruption?
I design a proxy for corruption based on fraudulent procurement
contracts in Croatian local government
– Cases in which firms with zero employees receive vast sums of money as
the only bidder in the procurement, firms that win tenders in which the
value of the procurement contract is significantly larger than their average
revenues, and firms with large losses which are indirectly subsidized by the
local government
– Based on interviews with key stakeholders in the procurement process:
special police investigators, civil sector anti-corruption watchdogs, local
government officials, public sector bureaucrats, and entrepreneurs

5. My research: vote-buying and fiscal profligacy in
Croatian local government
Building small powerful coalitions of interests to keep a politician in office for
long periods of time (the longer they are in power, the higher the levels of
corruption)
Keeping local taxes high and avoid any punishment for doing so
Voters reward corruption and fiscal profligacy: higher debts and deficits, and
higher spending on construction significantly increase re-election chances

6. My research: vote-buying and fiscal profligacy in
Croatian local government

7. My research on local politics in Croatia
“Corruption and re-election: How much can politicians steal without getting punished?”, Journal of Comparative Economics,
first online, 17 September 2019
"Post-war voters as fiscal liberals: local elections, spending, and war trauma in contemporary Croatia" (with Josip Glaurdić),
April 2018, East European Politics, 34(2): 173-193.
"Political economy of local government in Croatia: winning coalitions, corruption and taxes", December 2017, Public Sector
Economics 41(4): 387-420.
– Awarded the prof.dr. Marijan Hanžeković annual prize for 2017 for best paper
"Granting votes: Exposing the political bias of intergovernmental grants using the within-between specification for panel data"
(with Josip Glaurdic), April 2017, Public Choice 171(1): 223–241.
"Political Economy of Corruption, Clientelism, and Vote-Buying in Croatian Local Government" in Petak and Kotarski
(eds.) Policy-Making at the European Periphery: The Case of Croatia, Palgrave Macmillan, 2018.

8. A quote from the chapter…
“Local politics in Croatia is no different than any other political
environment throughout the transitional world. The system is riven with
endemic corruption, serving simultaneously the interests of the politicians
(the patrons) and either the rent-seeking private sector, politically-
connected voters, or any other vested interest (the clients). In such a system
the best response function of each agent is to be connected and be part of
the appropriate clique, the goal of which is to act upon common interests
of all those included. The clients get their exclusive deals with the
government, while the patrons get re-elected and keep holding power
virtually unconstrained. “

9. Can we escape this trap?

10. WHAT MAKES A
TRANSPARENT
BUDGET?
Full budget transparency of the local
government implies that the public has a direct
insight into every single transaction within the
government budget (city, municipal, national).
This implies access to public information such
as: travel expenses and daily allowances,
lunches and dinners, gross employee salaries,
loans, big construction jobs, and every single
procurement contract.
In short, to whom, when, how much, and why
has a certain amount been paid.

11. WHAT MAKES A
TRANSPARENT
BUDGET?
The goal is to respect the right of the
citizens to know where their money is
being spent and create a positive
perception that taxpayers have control
over budget execution.

12. Most cities in Croatia have ‘open’ budgets.
There is a big misunderstanding of what it means to have an open
budget and what it means to have a transparent budget.TRANSPARENT
VS
OPEN BUDGETS
EXAMPLES

13. What does an open budget look like?
An interactive map of revenues and expenditures in the city of Bjelovar
TRANSPARENT
VS
OPEN BUDGETS
EXAMPLES
https://proracun.bjelovar.hr/

14. What does a transparent budget look like?
Example: US Federal budget ($4tn annual)
Interactive search engine of all entry and exit transactions
EXAMPLES
TRANSPARENT
VS
OPEN BUDGETS
https://www.usaspending.gov/#/search

15. TRANSPARENT
VS
OPEN BUDGETS
What does a transparent budget look like?
Example: EU Commission grants
Interactive search engine of all entry and exit transactions
EXAMPLES
https://ec.europa.eu/budget/fts/index_en.htm

16. Full budgetary
transparency in Croatia

17. SOLUTIONS
CITY OF BJELOVAR – THE FIRST INTERACTIVE SEARCH
ENGINE OF ALL TRANSACTIONS FROM THE LOCAL BUDGET
Simple and easy solution that tracks all details of revenues and
expenditures, available on a web-based app:
https://transparentnost.bjelovar.hr/
BUDGET
TRANSPARENCY

18. SOLUTIONS
CITY OF BJELOVAR – THE FIRST INTERACTIVE SEARCH
ENGINE OF ALL TRANSACTIONS FROM THE LOCAL BUDGET
The simple search engine shows every query and allows the download
option in XML, CSV, or JSON formats.
BUDGET
TRANSPARENCY

19. SOLUTIONS
CITY OF BJELOVAR – THE FIRST INTERACTIVE SEARCH
ENGINE OF ALL TRANSACTIONS FROM THE LOCAL BUDGET
Use the advance search to filter across several categories: OIB, name (of
person or company), postcode, date, amount, description, and economic
or functional budget classification
BUDGET
TRANSPARENCY

20. SOLUTIONS
CITY OF BJELOVAR – THE FIRST INTERACTIVE SEARCH
ENGINE OF ALL TRANSACTIONS FROM THE LOCAL BUDGET
Possibility of downloading the full dataset via an API key
BUDGET
TRANSPARENCY

21. Our approach
1. Design of the web-based search engine app
Includes: technical solution and app design, visual
representation of transactions, hosting on our server, further
control of data quality
2. Consulting and analytics
Analytical approach in data processing, legal study for GDPR
compliance, advisory services on data transfers, workshops
for local accounting officials on how to import the data
dr.sc. Vuk Vuković, vuk@oraclum.co.uk
dr.sc. Dejan Vinković, dejan@oraclum.co.uk
BUDGET
TRANSPARENCY

22. How does this help solve the
corruption problem?
1. Prevents fraudulent allocation of public procurements, donations, subsidies, and
other expenses from the budget, as well as changes of urban planning laws based
on criteria of cronyism and political connections
2. Prevents any possibility of nepotism and employment through local political parties
in an effort to “buy votes”
3. Prevent inefficient spending of public resources
4. Encourage the citizens towards a more active cooperation with the local
government in solving problems of the local community
5. Reach an unprecedented level of budgetary transparency emulating the level of
public accountability in advanced democracies