An Assessment of Corruption in the Procurement Profession in Government
# 05 / 2010
TI Working Paper # 04/2010
Table of Contents
1. Understanding corruption in public procurement
2. The cost of corruption for procurement 3. Corruption risks and responses 4. Effective and transparent procurement systems
Corruption and Public
Procurement
Public procurement affects all aspects of people’s lives and assumes a large share of government budgets. The acquisition of buildings and land by municipal and national governments, the construction of roads, the provision of health and education services, and the construction and operation of drinking water and sanitation systems are just a few examples of public investments that involve procurement. The Organisation for
Economic Co-operation and Development (OECD) has estimated the value of government procurement markets worldwide to be
US$ 2 trillion annually.1 Wherever such large quantities of money change hands, the risk of corruption is high.
People often refer to public procurement as being very complex and a technical subject. But this assumption should be challenged. Anyone can understand why it is important to introduce safeguards against corruption in public procurement.
Everyone — from individual citizens to high level government officials — can play a role in ensuring tax payers’ money spent on procurement delivers good quality services at a fair economic cost for all. The purpose of this paper is to raise awareness and guide interested individuals towards promoting greater transparency and integrity in public procurement.
© iStock
Corruption and public procurement
TI Working Paper # 05/2010 2 www. t ransparency.org
1. Understanding corruption in public procurement
In global policy circles, the importance of corruption-free procurement is uncontested. Numerous bilateral donors and all international organisations — including the OECD, multilateral development banks, the World Trade
Organisation and the European Union — have emphasised the need to
TI Working Paper # 04/2010
Table of Contents
1. Understanding corruption in public procurement
2. The cost of corruption for procurement 3. Corruption risks and responses 4. Effective and transparent procurement systems
Corruption and Public
Procurement
Public procurement affects all aspects of people’s lives and assumes a large share of government budgets. The acquisition of buildings and land by municipal and national governments, the construction of roads, the provision of health and education services, and the construction and operation of drinking water and sanitation systems are just a few examples of public investments that involve procurement. The Organisation for
Economic Co-operation and Development (OECD) has estimated the value of government procurement markets worldwide to be
US$ 2 trillion annually.1 Wherever such large quantities of money change hands, the risk of corruption is high.
People often refer to public procurement as being very complex and a technical subject. But this assumption should be challenged. Anyone can understand why it is important to introduce safeguards against corruption in public procurement.
Everyone — from individual citizens to high level government officials — can play a role in ensuring tax payers’ money spent on procurement delivers good quality services at a fair economic cost for all. The purpose of this paper is to raise awareness and guide interested individuals towards promoting greater transparency and integrity in public procurement.
© iStock
Corruption and public procurement
TI Working Paper # 05/2010 2 www. t ransparency.org
1. Understanding corruption in public procurement
In global policy circles, the importance of corruption-free procurement is uncontested. Numerous bilateral donors and all international organisations — including the OECD, multilateral development banks, the World Trade
Organisation and the European Union — have emphasised the need to
References: 1 OECD, ‘The size of Government Procurement Markets’ (Paris, France: OECD, 2002). 2 Transparency International, ‘TI Plain Language Guide’ (Berlin, Germany: Transparency International, 2009) 3 Transparency International, ‘Handbook: Curbing Corruption in Public Procurement’ (Berlin, Germany: TI, 2006) 7 Transparency International, ‘Handbook: Curbing Corruption in Public Procurement’ (Berlin, Germany: TI, 2006) death-toll/9256/. Also see: Monica Escaleras, Nejat Anbarci and Charles A. Register, ‘Public sector corruption and major earthquakes: A potentially deadly interaction’, Public Choice (2007) 11 This section is largely based on the contents of Transparency International (2006), op.cit. and OECD Principles for Integrity in Public Procurement (2009) 12 Transparency International, ‘TI Plain Language Guide’ (Berlin, Germany: Transparency International, 2009) 16‘Ghana: Country Report’, in ‘Transparency International’s Global Corruption Report 2009’ (Cambridge, UK: Cambridge University Press and TI, 2009). 17 Large parts of this section are based on: OECD, ‘Methodology for Assessment of National Procurement Systems’’, Version 4 (Paris, France: OECD, 17 July 2006): 20 OECD, ‘Methodology for Assessment of National Procurement Systems’’, Version 4 (Paris, France: OECD, 17 July 2006): www.oecd.org/dataoecd/1/36/37130136.pdf.