Procedural Safeguards and Corruption-Resistant Institutions

Rick has blogged previously about how disclosure programs and transparency measures alone will not solve public sector procurement corruption.  Though these measures may be better than nothing, releasing information accomplishes little unless there are mechanisms in place with the resources to review it, corroborate it, and act on red flags.

The shortcomings of disclosure regimes suggest that we should be thinking instead about how combinations of procedural safeguards might make corrupt dealings harder to perpetrate and easier to detect.  For example, the OECD’s 2014 Toolkit for Integrity section on procurement outlines a range of steps that ministries can use to insulate procurement officers and processes from undue influence.

  • First, ministries can produce a “risk map” of their procurement process to identify vulnerabilities where participants would have most opportunity to influence the outcome – for example, at the stage of drafting the specifications, solicitation of bidders, or (most obviously) in the selection of winner.
  • Second, by focusing on these points, governments can structure the tender process to make it more challenging to manipulate.  For example, key authorizations could require double approval or be split among different offices.
  • Third, governments can attempt to insulate administrators from opportunities for bribery through gift and asset disclosure and rotations among different industries or geographic sectors.

Taken alone, any of these measures are easily evaded.  But collectively, process-oriented reform of this kind can make it more difficult to develop inside relationships and more complicated and expensive to convey a bribe. When bribery costs more and has a lower likelihood of achieving its goal, the circumstances in which there is an expected benefit from bribe-paying begin to narrow, at least at the margins.  And while all the record-keeping in the world won’t prevent corruption if leadership turns a blind eye, falsification of records often leaves behind detectable patterns than can be uncovered by investigators.

Thus, even where it may not be feasible to root out corrupt individuals one-by-one, procedural safeguards can provide a starting point.  It’s worth noting that, with the exception of measures that regard political relationships, anti-fraud regimes recommended for the private sector employ similar mechanisms: a code of ethics, a reporting or whistleblower policy and hotline, and a risk assessment that is used to put in place appropriate accounting controls and auditing.  In thinking about anticorruption reform more generally, we should be thinking about how common principles for corruption-resistant institutions can applied beyond procurement to government licensing, the regulatory process, and even civil and criminal adjudication and decision-making and law enforcement.  In this respect, administrative reform may also be necessary first step toward bolstering enforcement: when it comes to ensuring the integrity of those tasked with guarding the guardians, sound organizational design and internal checks become that much more critical.

One thought on “Procedural Safeguards and Corruption-Resistant Institutions

  1. Daniel, You cover many good points in your article, but let me highlight another related point that also deserves your reader’s undivided attention. This point is particularly salient for those working in developing countries, where resources, capacity and often political will are severely limited. There, civil society monitoring and reporting has proven to be one of the most important oversight mechanisms or tools. This kind of external oversight can take many forms, including public-private partnerships, but in countries where corruption is endemic it has generally proven to be the best approach, especially when coupled with stronger internal oversight reforms and external accountability. The need for a holistic approach to addressing this important global problem just reenforces the old adage that even the best internal oversight mechanisms don’t usually work when dealing with endemically corrupt institutions, processes or those with monopoly power. That is why access to information laws and policies, as well as civil society engagement, oversight and reporting (including whistleblowing), are all important. One good place to look for more on this subject is in a fairly recent 2012 publication by Transparency International entitled: A New Role for Citizens in Public Procurement. http://www.cmi.no/publications/

    Keith

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