PART I CONFRONTING CORRUPTION IN SECTORS AND FUNCTIONS

CHAPTER 1

Public
Procurement
 PART I CONFRONTING CORRUPTION IN SECTORS AND FUNCTIONS CHAPTER 1 PUBLIC PROCUREMENT

Introduction
Public procurement is often placed at the epicenter efficiency. These principles are reflected in easily
of discussions of corruption. Procurement features available and frequently utilized model procurement
prominently in corruption scandals in developed laws, such as the UNCITRAL Model Public Procurement
countries as well as developing countries, suggesting Law. Implementation of procurement laws are supported
that procurement has characteristics that make it by a host of international agreements that create legally
uniquely vulnerable to corruption and that corruption enforceable commitments, including UNCAC and the
in procurement is particularly resilient. This chapter World Trade Organization’s Agreement on Government
examines the nature of corruption in public procurement Procurement. Much less information exists on how to
and explores efforts and initiatives to reduce corruption establish well-functioning procurement systems in the
in state contracting.1 There is an abundance of face of opposition by individuals and groups benefiting
information on principles of good practice in public from existing practices.
procurement relating to transparency, equity, and

Why is it important to tackle corruption in

public procurement?2
Corruption in public procurement has wide-ranging consistently identify corruption in public procurement
ramifications for the economy and delivery of as among the major constraints to doing business.5
public services. The need to tackle corruption in Corruption in public procurement continues to be a
public procurement is based on the importance of substantial issue in developed as well as developing
public procurement in public spending and economic countries and large public scandals involving firms
activity, the prevalence of corruption in procurement such as Odebrecht, 6 Siemens, 7 and Airbus 8 have
and its impact on how public money is spent, private demonstrated that corruption in public procurement
sector investment, and the availability and quality of happens in some of the most advanced economies.
public services. Moreover, international and global distortions are
sometimes caused by corruption in public procurement
Public procurement constitutes a significant transactions.
proportion of public spending. It accounts for between
10-25% of public spending globally. 3 This figure is The costs and societal damage caused by corruption
often substantially higher in countries where the state in public procurement extend far beyond the price
participates significantly in economic activity and tag of capital projects. Corruption leads governments
directly provides services. Public procurement is often to overinvest in capital projects, given the ease of
the single largest channel for government spending, capturing rents from public procurement, and reduces
the single largest source of commercial spending in a their return on investment.9 It also robs school children
country, and the dominant means for translating public of safe and well-built classrooms, reduces the quality
money into public services. of their education by limiting their access to textbooks
and school supplies, and endangers their health and
Estimates from a variety of sources indicate the health of their communities as publicly procured
that corruption in procurement is frequent and medicines are privatized and become inaccessible to
extraordinarily costly. Over the years, international the poor. Corruption also results in the provision of
organizations have consistently suggested that sub-standard infrastructure, which increases accidents
between 10-30% of the cost of capital investment and wear and tear costs, inflates the user-charges
projects is consumed by corruption.4 More than one- required to pay for services, and acts as an extra tax
half of the cases relating to foreign bribery involve on the citizens. The cost of corruption is then borne by
public procurement, and surveys of business owners the poorest citizens who are most dependent on public

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PART I CONFRONTING CORRUPTION IN SECTORS AND FUNCTIONS CHAPTER 1 PUBLIC PROCUREMENT

resources for access to life-sustaining medicine, public procurement enables well-positioned firms to dominate
shelter, or the knowledge and expertise required for markets and restrict the ability of new firms to obtain
modern economic activity. contracts and access markets through innovation,
creating competitive imbalances with lasting impact for
At the same time, corruption in public procurement economic growth.10 The firms that lose out are often
creates noxious incentives for firms and distorts those who do not have the financial or political means
economic development. Private sector firms are to access public procurement opportunities, but who,
encouraged to invest in building networks of influence paradoxically, could have been the prime drivers for
instead of investing in skills and expertise, to the the creation of local jobs, thus reducing inequality and
detriment of increased efficiency. Corruption in public poverty.

What are the characteristics of corruption in

public procurement?
Although procurement covers a wide range of discretionary nature of the activity. Discretion, and
actions, certain characteristics remain the same. the use of professional judgement, is at its highest in
In most countries, public procurement takes the form of cases of high-value sophisticated procurement, where
a vast number of contracts signed by a broad collection the state invites private parties to propose methods to
of government agencies for an extraordinary variety of achieve the specified outcomes.
goods, services, and projects.11 The single term, public
procurement, encompasses the purchase of office By its very nature, public procurement is highly
paper in a small village, contracting for the regular vulnerable to corrupt activity. Given that public
maintenance of roads across a district for a period of procurement requires multiple discrete decisions, which
years, investment projects supported by development take place in decentralized settings involving public and
partners, as well as the acquisition and deployment of private actors and large sums of money, the frequent
an advanced military defense system to protect the association between corruption and procurement
security of the nation. While these actions could not comes as no surprise. There is a tendency for the analysis
be more different in regard to scale, complexity, and of corruption vulnerabilities to concentrate on the risks
cost, they share common features. They are the result relating to the selection of a contract award winner, and
of choices about what to purchase, from whom, and a very rich literature has developed detailing different
at what price. They require an act of purchasing often bribery, extortion, and collusion schemes used to
via a contract, and a determination by the purchaser of capture contracts.12 It is clear, however, that corruption
whether the contract terms have been properly fulfilled occurs not just around the selection of an award winner,
and payment is warranted. but at every stage in the procurement process, from
the selection of what to buy to the determination
Despite the development of useful tools, discretion that a contract has been fulfilled and the receipt of
remains at the core of procurement. Each step final payment. In a compromised process, each stage
along the process requires government officials to is engineered to increase the chances of a preferred
perform activities that involve the implementation of contractor obtaining the contract.
policy choices necessitating extensive interpretation
and often substantial discretion. A large number of Corruption risks are as deep as they are broad.
tools have been developed to guide procurement, Corruption can take the form of an individual paying
including detailed processes to determine capital a bribe to win a contract in a single transaction. In
investment decisions, standard bidding documents, other instances, corruption in procurement takes place
explicit rules on the evaluation of bids, and exhaustive systematically via a network involving multiple firms
price lists for products purchased by the state. Each and individuals both inside and outside of government.
of these instructs officials on how they are expected Corruption networks can be strong and entrenched,
to make choices, but they do not alter the inherently lasting many years and involving the entire market

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for a good or service.13 In these instances, corruption Corruption risks are also multifaceted. Corruption
is systematic and is a function of the relationships risks in public procurement can be driven by the type
among parties. In some countries, the money obtained of procurement process (open versus closed), the
through systematic relational corruption in public processes used by the ministry and agency responsible
procurement fuels political parties and plays an for executing procurement, and the type of contractor
essential role in financing politics. In these situations, and his/her network of connections. Other drivers
public procurement serves as a way for economic elites include the mechanisms for paying contractors and
to capture contracts and public funds and for political managing the assets that have been created, and
elites to finance their continued power and authority.14 the interests of those parties with responsibility and
Network domination of procurement is not exclusive to authority for overseeing the procurement process. The
high-value national markets. It can be found at all levels multifaceted nature of these risks creates extraordinary
where power and the authority to spend public money challenges in improving accountability and integrity in
through procurement exist. impactful ways.

What do we know about fighting corruption

in public procurement?
A vast and growing literature provides guidance on monitoring of procurement transactions and contract
fighting corruption in standard public procurement implementation; mechanisms for raising and addressing
transactions. This includes guidance on bidding complaints; Whistleblower statutes to encourage and
documents that define the required technical protect informants; and clarity in the prosecution and
specifications, design elements, and inputs required. sanctioning of individuals when corruption is identified.
The Methodology for Assessing Procurement Systems In addition to these technical aspects, rule-based
(MAPS), an internationally developed standard for procurement systems have well-defined roles for
evaluating procurement systems, identifies the features citizens, communities, civil society organizations, and
of procurement systems that operate with integrity, the private sector in the monitoring and oversight of
and allows countries to determine what needs to procurement transactions and outcomes.18
be put in place to address corruption vulnerabilities.
Core principles to inform the fight have been set Increasingly, e-GP is identified as the key platform
out in publications, such as the OECD’s Preventing for delivering change and addressing corruption
Corruption in Public Procurement.15 The guidance vulnerabilities. Buoyed by the positive impact of the
provided in this and other similar publications primarily implementation of fully functional systems in Ukraine
restates the stipulations on procurement in the UN and Rwanda, policy makers, advisors, and other
Convention against Corruption and the OECD’s own stakeholders look to solve their procurement efficiency
Convention on Combating Bribery of Foreign Public and corruption issues by rolling out end-to-end e-GP
Officials in International Business Transactions (OECD, solutions.19 Such systems, especially when their use is
1997).16 Books and papers by groups like Transparency mandatory, could standardize processes for carrying out
International provide complementary pointers and procurement, and at the same time they might radically
lessons on using particular tools in fighting corruption, enhance transparency around bidding opportunities,
such as integrity pacts or participatory governance.17 bid evaluation, and contract award winners. The shift
from paper to a digital platform can allow for the
While differences in emphasis certainly exist in collection, sharing, and analysis of outcomes across
these materials, there is a general consensus on the vast range of individual procurement transactions.
the features of procurement systems that operate Real-time monitoring could identify corruption risks as
with high degrees of integrity. Such features include a procurement transaction goes through its different
transparency; procedural standardization that reduces phases, allowing officials the possibility of intervening
the need for interpretation or human interaction; when red flags are triggered in the process to prevent
detailed and inclusive control; oversight and corruption from ever taking place. The analysis of large

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volumes of transactions over time could enable the and a reduction in the time required to process a
identification of subtle corruption patterns and trends transaction, no statistically significant changes in cost
that might otherwise avoid detection, uncovering and time overruns appear to have occurred.22
hidden corruption networks.
Several reasons have been put forward to explain
The power of e-GP to combat corruption may the difference between the expected impact of
be fully activated when the data that is being e-GP on corruption and the actual results.
collected is put into a machine-readable format,
made publicly accessible, and linked with other • Low capacity. The primary reason may be the
data sets. Linking data on contract award winners low capacity of the institutions and individuals
with emerging databases on beneficial ownership may responsible for executing procurement and for
allow public and private parties to know who is really managing the switch to e-GP systems. Studies
competing for and winning procurement contracts and have repeatedly revealed the limited expertise
could identify previously hidden networks and conflicts and functionality of procurement officials and
of interest. Linking procurement data with data from organizations, who frequently have received little
integrated financial management systems can create or no training in how to carry out their current jobs,
the opportunity to systematically track physical and much less manage the implementation of an entire
financial progress and may create the potential to new system.23
intervene where corruption vulnerabilities appear to
be substantial before the loss of public funds happens. • Differences in technology. e-GP systems differ
However, there is limited attention and/or guidance greatly regarding their functionality. In many
on how initiatives might be designed or sequenced jurisdictions, including in large economies,
in jurisdictions without well-functioning systems for technology is used only to switch manual
transparency, public administration, law enforcement, processes into automated ones. This, while
and judicial decision-making, or where corruption is improving transactional efficiency, is unlikely to
relational and systemic. achieve much else. Similarly, limited change is
likely to be generated if barriers to registration
W hi le ex p ecta tion s a re hi g h t h a t t he are retained even in an e-GP system. Performance
implementation of e-GP will be associated with changes would, perhaps, be more easily captured
dramatic reductions in corruption in public by considering only those systems that involve in-
procurement, the experience to date is decidedly depth modification of practices, and not simply the
more mixed. Cross-country analysis was unable to introduction of technology into the process.
detect a relationship between the adoption of e-GP and
the level of bureaucratic corruption or the willingness • Lack of corruption baselines. The lack of useful
of firms to bid for procurement contracts. 20 In more corruption baselines established prior to the
developed countries, the adoption of e-GP was found implementation of an e-GP system prevents
to increase the likelihood of firm bidding. research from measuring change and detecting an
empirical relationship between performance and
Country-level studies of the impact of e-GP present the move to e-GP. Without a robust corruption
highly variable results. e-GP in India and Indonesia baseline, researchers sometimes place excessive
was found to be associated with positive changes in a reliance on measuring changes in cost savings,
number of variables that may be linked with corruption— namely the difference between the cost estimate
the percentage of contracts awarded to non-local firms, for the procurement and the cost obtained at
a reduction in contract delays in Indonesia, and an the end of the tendering process. However, such
improvement in the quality of construction in India. 21 calculations are difficult and subject to a wide
At the same time, the research was unable to detect range of influences and biases.
a relationship between e-GP and the cost of contracts
at the time of signing, or the final amount paid to the The expected relationship between corruption
contractor. Ongoing and preliminary analysis of the and e-GP has so far eluded detection, perhaps
influence of e-GP in Bangladesh suggests similar mixed due to a combination of the above reasons. While
findings; while the reform is associated with a rising theories of change explain why an intervention should
number of tenders, an increasing number of bidders, reduce corruption, the impact of actual reforms often

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falls short of expectations or results in a number Before concluding this section, it is important
of unexpected consequences. 24 For example, the to discuss an important caveat on the features
introduction of e-GP in Albania significantly reduced a s s o c i a te d w it h we l l - p er for m in g p u b l ic
personal contact with officials, but at the same time it procurement systems that operate with high
led to a surge in the number of unpublished, negotiated integrity. Recommended practices on confronting
procedures done outside of the system.25 In Chile, the corruption are likely to generate large costs for output-
expansion of external audits of public procurement was oriented, high-value contracts. In these contracts,
closely associated with an increase in the use of direct where the government defines the outputs it desires
contracting.26 without prescribing inputs or specific designs, actions
that focus on standardization of processes, reduction
An efficient and rule- ba sed procurement of discretion, and extensive auditing and oversight
system, based on an e-GP platform, is strongly may perversely end up reducing the benefits obtained
associated with high performance and low levels through contracting with the private sector.
of corruption. Similarly, the successful prosecution
of individuals who engage in corrupt actions in public Large capital projects are not efficiently purchased
procurement is a feature of most systems that maintain through rigid processes for evaluating bids
high standards of integrity. However, the history of submitted in accordance with specified designs
efforts to establish effective systems for sanctioning and inputs. In many cases, shifting the responsibility
corrupt officials or to drive out corruption by moving of innovation to the private sector unleashes efficiency
to e-GP demonstrates the space between inputs and and effectiveness, creates the right incentives and more
outcomes. Many countries, especially those with poorly effectively shapes markets. It creates a body of the sub-
performing procurement systems that are assessed to contracting industry that is driven and regulated by the
be systemically corrupt, can point to an extensive list of market and survives by its capacity to deliver value. This
failed efforts designed to fill “gaps” in accountability reduces government intervention (except at the initial
by importing best practice models of transparency, procurement stage) and corruption possibilities.
participation, and efficiency.
Output-based contracts, whether they are
The mixed impact of such initiatives appears structured as public-private partnerships or as more
to often reflect the degree to which initial traditional procurement, are negotiated, multi-
assessments appreciated how accountability stage contracts that often adapt over time as new
worked or did not work around procurement, and innovations are identified, and both the contractor
the formal and informal mechanisms underpinning and the state develop a richer understanding
existing practices. Assessments that provide useful of their objective. Such contracts require a strong
inputs for reform are designed to capture the nature of foundation of trust among all parties in order to enable
the corruption problem, the capabilities of the parties the best options to come to the fore. They also require
responsible for managing change, and the ability of a high degree of expertise and sophistication across
those who benefit from existing practices to subvert or all parties in order to ensure that the parties have the
circumvent the efforts. ability to detect honest experimentation from strategic
behavior.
Experience in confronting corruption in public
procurement demonstrates the importance of For output-based contracts of this sort, approaches
resilience in the pursuit of reform, and the continued to integrity that emphasize extensive systems of
use of authority to maintain change. The response internal and external reviews to test compliance
to an anti-corruption initiative, especially one that is with standard requirements are likely to be at
powerful, has often been to wait out the reform until odds with achieving best value. Multiple review
political attention shifts to another issue or politicians and oversight processes generate large time and
can be co-opted. Alternatively, they shift the locus of cost delays and reduce the space for innovation and
corruption, moving from influencing the contracting experimentation as contractors are forced to justify their
process to distor ting contract implementation. actions before they can determine their effectiveness.
Countries are successful when they develop and sustain The best firms are likely to be discouraged from bidding
reforms over time in ways to counter adaptations and in environments where oversight and accountability is
defeat efforts to circumvent change. structured in ways that are inimitable to trust.

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Complex output-based contracts remain the phenomenon. A recent study of the interactions
exception rather than the rule and are found between audits and the complexity of procurement
primarily in advanced and sophisticated markets. in Chile demonstrated the negative consequences
At the same time, the tendency for accountability of this dynamic as officials relied upon less efficient
processes to multiply as contracts become more contracting in order to reduce costs associated with
complicated and more valuable is a more general heightened oversight and monitoring.27

What is needed to reduce corruption in public

procurement?
Research studies and country experience are the does not always appear. When audit agencies are
two primary sources for learning what can reduce themselves corrupt, increased auditing serves to shift
corruption in public procurement. The research studies the distribution of corruption or, in the worst-case
examine the impact of different types of intervention scenario, increase rents.31
and the country experience focuses on those countries
that have been successful in reducing such corruption. At a country level, many of the countries that
Both sources have their limitations since many of the have succeeded in reducing corruption overall
“experiments” on the impact of different interventions have undertaken major reforms of their public
come from more developed countries with better procurement systems. 32 In countries such as South
data sources, and there have been few efforts to track Korea, Georgia, Rwanda, and Estonia, changes in
corruption indicators over time in public procurement procurement policies, which focused on increasing
systems. Moreover, these sources provide little or no competition and transparency, have been reinforced
information on addressing corruption in high-value by advanced e-GP systems that have standardized
output-based public procurement. practices and increased efficiency. In a number of
cases, provisions for meeting the Open Contracting
Transparency is the sole factor that has been Data Standard have been built into the e-GP systems,
demonstrated to reduce the risk of corruption in ensuring a high degree of transparency and information
procurement across different jurisdictions and access. These efforts have led to substantial increases
conditions. Analysis of cross-country data reveals that in the level of competition in procurement and much
ex-ante transparency in regard to the completeness of greater transparency about the identity of contract
information in the call for tenders reduces corruption award winners.
risks substantially. 28 In this situation, transparency
allows horizontal monitoring of insiders in the bidding Successful anti-corruption efforts that include
process in ways that lead to lower levels of corruption. work on reducing corruption in public procurement
share a number of core features. These include:
Increased frequency of audits has also been
identified in a number of settings as leading to • Strong leadership. Successful anti-corruption
reduced levels of corruption. Studies in Brazil29 reforms are initiated and maintained through
found a decrease in costs (of approximately 10%) and strong leadership from the highest political
decreases in audited resources involved in corruption level. Political leadership creates an overall vision
(of approximately 15 percentage points) linked with and orientation, while administrative leadership
initiatives to increase the frequency of auditing by 20 establishes the necessity and the space within
percent. A 2007 study of village-level procurement in institutions to introduce new processes and
Indonesia found that increasing the frequency of audits systems. Finally, technical leadership within
to 100% resulted in a decline in missing expenditures organizations establishes new behaviors and
by 8 percentage points. 30 However, the relationship protocols that show others how to adopt new tools
between increased audits and lower levels of corruption and methods.

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• Problem-driven and outcome-oriented. Successful medium to long term and grow over time in order to
initiatives to reduce corruption in public sustain change in the face of repeated opposition.
procurement are problem-driven and outcome- Resilience is often built through producing concrete
oriented. This requires careful analysis of the changes and establishing expanded coalitions
specific mechanics of corruption, and often of support that include enhanced roles for the
the development of sector or ministry-specific private sector, and for civil society/communities in
approaches to reducing the problem. Problem- oversight and monitoring.
driven approaches to corruption often result in
distinguishing among types of procurement. • Complemented by other refor ms. P u b l i c
Addressing corruption problems in local level procurement reforms that succeed in reducing
procurement in small markets involves actions that corruption tend to draw support from other
are different from those that would be employed complementary reforms. Most directly, such efforts
to reduce corruption in the procurement of high- have been aided by the introduction of effective
volume standardized goods. In the same vein, systems for asset declaration, prevention of
outcome orientation means that efforts to confront conflict of interest, revealing beneficial ownership
corruption in procurement are likely to be sector of firms, and enhanced efficiency in sanctioning
specific, since corruption functions differently, for misbehavior. Concurrent reforms to improve public
example, in a sector like irrigation than it does in financial management, introduce performance
wastewater management or education. Outcome contracting, build skills and expertise within
orientation also requires close monitoring not the civil service (including procurement skills),
only of progress in implementing the reform but privatize and/or improve corporate governance
also of outcomes. For example, establishing of state-owned enterprises, and remove barriers
multiple points of control in order to prevent and to entry and competition can all contribute to
reduce corruption in high-value procurement may strengthening accountability and integrity, and to
perversely convince the most reputable firms to changing behavioral expectations and incentives.
stay away if they determine that there is insufficient These broader changes are essential in addressing
trust to enable creativity and flexibility in creating the systemic collective action problems that drive
an asset.33 corruption in procurement in many jurisdictions
and settings.
• Sustainable. Successful efforts are built over the

How to gain traction in fighting corruption in

public procurement: Case studies
Reforms have to be tailored to the prevailing and Chile—describe anti-corruption reforms in public
environment. As with many reforms, much of the procurement that alternative emphasize changing
challenge in fighting corruption in public procurement strategic transactions, systems for undertaking public
revolves around defining an approach that is procurement, and the interactions between economic
appropriate for the problem at hand and tailored and political elites. Differences in the focal point for
around the authorizing environment for reform. Reforms reform occur along a governance continuum.
that look good on paper often fail because they are
not shaped and structured around the political and The Somalia case explores an effort to reduce
administrative realities that exist. The three case studies corruption in a limited number of strategic high-
that accompany this overview describe very different value procurement contracts, using a specially
anti-corruption effor ts relating to procurement. designed mechanism established jointly by
However, they were all designed to have traction development partners and the Government of
and have been shaped by the broader governance Somalia. The intervention does not attempt to reform
environment. The three cases—Somalia, Bangladesh, public procurement due to severe limitations on the

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capacity and authority of the government to manage The final case, Chile, explores a reform effort
large reforms and the systemic nature of corruption. where corruption issues in public procurement
The initiative is confined to restricting corruption in a were understood to be symptoms of a larger
number of transactions, using the combined authority problem in the relationship between economic
of the government and international development and political power. The initiative, which was largely
partners. Its success demonstrates the ability to achieve driven by an independent and non-political task force,
results in even the most challenging of environments. recommended a number of steps to improve the
coherence of the public procurement system, within
The Bangladesh case explores an effort to reduce a larger program of reforms aimed at restructuring
corruption as one dimension of an overall reform the role and transparency of the private financing of
of the country’s public procurement system. In this political parties. In the context of a well-performing
instance, anti-corruption efforts are closely intertwined state with a relatively high degree of capacity and
with work on establishing new mechanisms for carrying integrity, addressing corruption in public procurement
out public procurement utilizing an e-GP platform. was approached primarily by modifying the incentives
Bangladesh officials included a number of measures to and dynamics in the overarching system of governance.
proactively address corruption in public procurement, As with the other two examples, the patterns of success
based upon their recognition of the impact corruption that were achieved demonstrate that progress can be
has on outcomes and the risk that corruption poses to made in modifying relatively fundamental governance
the implementation of the reform. The results to date issues, but the overall process of change is long and
demonstrate both the progress that can be made as progress is not constant.
well as the tenacity of the problem.

Conclusion: What is realistic to expect?

The major misconception is the assumption successes will face challenges and that reform progress
that, as long as there is sufficient political will, will not be a straight and linear line. Demonstrating
corruption can be solved by a technical fix done by concrete progress is an essential part of building
the government to address an accountability gap reform momentum, just as learning from setbacks is
or capacity weakness. Sometimes that fix is asserted fundamental to establishing sustained change. Anti-
to be greater oversight, stronger sanctions, enhanced corruption reforms in public procurement that succeed
transparency, or the introduction of e-GP. Reforms are designed to achieve concrete outcomes relating
based on this approach often feature the adoption to a reduction in corruption and an improvement
of “best practice” processes and practices that have in procurement outcomes. Such reform programs
been demonstrated to be closely associated with well- invariably involve actors outside of government, and
performing procurement systems that operate with are sustained through coalitions of government, private
low levels of corruption. The track record of success sector, and civil society groups.
of these efforts is not encouraging, especially in those
environments where state capacity and authority are One corollary to the point above is that impactful
weakest, where civil society and the private sector are efforts to reduce corruption make use of existing
fractured and fragmented, and where corruption is resources. Countries should only attempt reforms that
most systematic. are within their capacity; otherwise, they are likely to fail.
Examples from countries that have reduced corruption
Nonetheless, experience has demonstrated overall, as well as from the specific cases in this report,
that it is possible to reduce corruption in public illustrate variations in the depth of those resources
procurement regardless of the extent of corruption and the strength of the forces opposing change.
and the overall governance environment. To achieve Some circumstances, such as those found in countries
progress in this regard, effective approaches are built emerging from conflict, may only allow for initiatives
for the long haul, with the expectation that initial to reduce corruption in certain transactions. In other

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cases, anti-corruption work can be woven into systemic ways to address corruption in how procurement
procurement reforms in ways that tackle corruption and functions. The development of new tools, like
increase the probability of reform success. e-GP and the broad range of other information
technologies, greatly expands oppor tunities for
A second corollary is that anti-corruption changes that strengthen accountability and oversight.
initiatives in public procurement must consider To be effective, efforts to reduce corruption in public
their overall impact on procurement performance. procurement need to identify ways to harness the power
This point is most evident in relation to output-oriented of technology to help drive fundamental changes in
high-value contracts that are not amenable to strict expectations, incentives, and authority, which form the
rules of the pass-fail variety. Obtaining best value basis for better outcomes.
in output-based procurement requires developing
a deeper engagement with the industry both at the In sum, successfully reducing corruption in public
pre-tender stage as well as during the procurement procurement requires a country-specific approach
process. In addition, it requires government officials to that pays as much attention to the incentives
use professional judgment in applying principles that and capabilities of the institutions responsible for
are clearly defined ex-ante. For procurement of this executing procurement as it does to improving the
type, constructive anti-corruption actions will involve transparency and efficiency of the procurement
defining very tight and verifiable boundaries, investing system. Overcoming repeated opposition to change
in professionalization of officials entrusted with requires harnessing forces in the private sector and
responsibilities for executing procurement, creating civil society who have a strong interest in improving
the right incentive structure, and developing a more procurement outcomes through greater integrity and
active engagement with industry while maintaining a accountability. These opposing forces are likely to be
level playing field. A more difficult process will be the stronger in high-corruption environments than they are
professionalization of the oversight bodies, so that in jurisdictions with lower levels of malpractice. New
procurement officers are not penalized for their bona- technologies, like e-GP can dramatically improve the
fide decisions. effectiveness and efficiency of public procurement
systems, but their potential will only be fully realized
T he centra lity of public procurement for when combined with work to deal with the causes of
development means that it is essential to find corruption and not just the symptoms.

Enhancing Government Effectiveness and Transparency: The Fight Against Corruption 27