Reforming Public Procurement in Emerging Market Countries

May 2007 | Jose Luis C. Syquia, US AID

Corruption in public procurement is just one of the many forms of corrupt practices that may occur in the public sector. However, it is one of the most critical barriers to development, because it creates leakages in a government’s financial and budgetary systems that directly lessen the impact of much needed health, education, infrastructure and other investment programs and projects. In addition to reducing the effectiveness of public services and diluting the benefits of growth, the natural uncertainty that is fostered by a state’s perceived lack of moral fibre can also negatively impact the investment climate. This study looks at the procurement reform process as comprising five basic steps: Step 1: Assessing the national public procurement system and practices, developing the strategy and planning the approach; Step 2: Developing or improving the legal framework; Step 3: Developing the oversight and institutional framework; Step 4: Building capacity; and Step 5: Assessing the impact of reforms at both the central and local levels. These steps are roughly sequential but not strictly consecutive, and they are designed to ensure a proper fit between international best practices and the developing country context. This entire process may take from four to six years to complete, and should be viewed not so much as a one-time event, but rather as a continuous cycle: Each step feeds into the next, and as each cycle ends with an impact assessment, the results of that assessment similarly feed into the next national public procurement assessment, identifying gaps that have not been addressed, and informing a new strategy and approach to guide the next round of reforms.

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