Buying Power Aid, Governance and Public Procurement

February 2008 | Olivia McDonald, Christian Aid

This study looks at the impact of donor-driven procurement reform on both governance and economic policy making. It is thus both a contribution to Christian Aid’s work on the impact of conditions that require increased liberalisation and an initial contribution to a body of work analysing donor-driven governance policy reforms and how far they actually deliver for poor people. It is aimed at officials of donor governments – particularly the UK – the World Bank and the Organisation of Economic Co-operation and Development’s Development Assistance Centre (OECD DAC). It is also hoped this will be useful for Christian Aid partners and other nongovernmental organisations, to help them develop a more critical approach to public procurement reforms and the aid effectiveness agenda. Procurement reform is a standard good governance reform, and is generally accompanied by reforms to the civil service; legal, judicial and security sectors; revenue and budget systems; and electoral, financial and administrative decentralisation. Good governance reforms have been a priority for donors since the 1990s. The number of public sector governance conditions as a percentage of overall World Bank lending conditions has increased from 17 per cent in 1995-1999 to 50 per cent in 2007. Essentially, a public procurement system is a set of rules that guide a government’s purchasing of goods, works and services, however big or small. Procurement reform seeks to guide all purchases: from a new blackboard to textbooks for all schools; from getting an engineer to mend a toilet to renovating an urban water system. Public procurement is perhaps one of the most controversial of all procurement reforms, because it has both important economic policy implications and governance implications.

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