Business in Partnership Against Corruption How Can Multilateral Development Banks Partner with Governments, Private Sectors and Civil Societies to Improve Transparency and Accountability in Procurement Asha Ayoung Lead Procurement Specialist, World Bank

Corruption in Procurement Corruption distorts public finance, affects the delivery of public services in health, education, transport etc and undermines efforts to reduce poverty Public Procurement is susceptible because of high amounts of money involved and high degree of discretion that politicians and government officials have over procurement in developing countries Risk is greater in countries with weak capacities to prevent, detect and punish corruption through: (i) checks and balances, (ii) controls and monitoring and (iii) existence and enforcement of laws and regulations To control corruption, one needs to understand how public procurement system operates

How to fight Corruption in Procurement While a well-designed and regulated system can reduce the risk of corruption, no system is totally corruption proof. To minimize risk, the Government should examine their procurement system for potential vulnerabilities by: Carrying out a comprehensive analysis of the country’s public procurement system Undertaking a general assessment of the risks (legal, institutional, organizational etc.) associated with the procurement process Assessing the performance and practices of the local private sector Developing a prioritized action plan to bring about institutional improvements

Potential Problems in Public Procurement System that Enable Corruption Legislative and Regulatory Framework The laws, regulations and implementing rules do not encourage competition, nor promote equity, transparency and accountability Institutional Framework and Management Capacity Central Institutions that do not have the capacity to oversee public procurement and/or conflict of interest situations Procurement Operations and Market Capacity Implementing agencies that are not effective and competent. A private sector that is not well organized and does not have access to the market Integrity and Transparency of the System Control and audit systems that are not effective, existence of inefficient and non-independent appeals mechanisms and limited access to information

Effective Partnerships to build Trust and Combat Corruption in Procurement Committed Government Donor Collaboration and Harmonization Involvement of National Key Stakeholders in diagnostic work Separation of Regulation from Controls and Involvement of Private Sector and Civil Society in Regulation and Oversight Involvement of PS and CS in Handling of Complaints Empowered beneficiaries and local communities in their project designs and procurement