Anti-Corruption, Governance and Procurement 13th Procurement, Integrity, Management and Openness (PRIMO) forum on “Curbing corruption in public procurement” May 23-25, 2017 – Kiev, Ukraine Hiba Tahboub – Manager Governance Global Practice 1
Procurement, Integrity, Management and Openness Forum 13 th edition of ECA SIP yearly procurement forum 24 Two objectives participating countries 10 international 50 government organizations officials 2
The costs and impact of corruption 3
4 Corruption State Functions Financial Market Monetary Public Order & Fiscal Sector Regulation Policy Enforcement Oversight Macro Public & Private Human Total Factor Financial Capital Physical Capital Productivity Stability • Insufficient spending Political • Inefficient public • Insufficient investment on investment in • Banking crises Instability • Costly investment and education/health research and • External sector production • Poverty and development imbalances and Conflict • Distorted composition of inequality • Inefficiency • Inflation projects • Disincentives for skills • Fiscal unsustainability • Distorted capital • Uncertainty • Financial Inclusion acquisition allocation • Distorted asset prices • Sills mismatch Potential Inclusive Growth
The costs and impact of corruption – the example of Nigeria Nigeria’s tax revenues amount • to 8% of GDP Problematic sector: Oil sector • $9.8 billion in outstanding • recoverable revenues from 1999 to 2008 Corruption in Nigeria could • cost up to 37% of GDP by 2030 5
The costs and impact of corruption – the example of the health sector Sector very vulnerable to corruption • Complex sector, large number of actors, different sources of funding etc. • Pharmaceutical/Medical equipment sectors particularly sensitive Corruption can have a tremendous impact in various ways • 6%, of annual global health expenditure being lost to corruption and errors • Distortion of the prices and the market, decreased quality of health, restriction of access to health etc. Various corruptive practices used •Bribes, bid collusions, favoritism, kickbacks… • Example: Since 1991, the health industry has paid US$30 billion in criminal fines in the US for various corruptive practices. 6
Corruption , Good Governance, and Development 7 Source: Transparency International Corruption Perceptions Index 2016
How corruption impacts governance? Governance Institutional Political Economic respect dimension dimension dimension Corruption 8
How does Governance contribute to the Bank’s goals? 9 First, Assessing the underpinnings Second, design and of governance malfunctions and implementation of public enablers policies Understanding governance malfunctions: Poverty reduction - exclusion -capture Effective policy -collusion design and implementation Understanding Shared governance prosperity enablers: -trust -legitimacy -cohesion
WB supports government enhance transparency and reduce corruption 1.Building a sound legal framework, including procurement and anti-corruption policies 2.Strengthening institutions to deliver their mandates 3.Capacity building and engaging civil society 4.Operational requirement under WB operations 10
Corruption and Procurement – A Negative impact Corrupted/Grey “Good” procurement: Source: OLAF study, procurement: https://ec.europa.eu/anti- 11 Average 5% losses fraud/sites/antifraud/files/d Average 18% losses ocs/body/pwc_olaf_study_ en.pdf
Mechanisms to curb corruption – Preventive measures Transparent and Clear legal Professionalization Red flags Accountable framework system Code of Conduct Protecting sensitive sectors 12
Mechanisms to curb corruption – Punitive measures Administrative Sanctions Penal Sanctions Protection of whistleblowers Collaboration among countries 13
Mechanisms to curb corruption – Close scrutiny by various actors National Audit Offices Anti-Corruption Agency Internal monitoring Citizens monitoring Civil Society Organizations 14
Governance continued to be a key theme The Governance and Anti-corruption (GAC) WDR 2004 focused on the short and long Strategy looked at how Governance could routes of accountability for service delivery address corruption inside and outside the Bank 15
Fraud and Corruption – The World Bank experience Procurement Corruption Governance and Framework definition Anti- corruption become Strategy introduced in effective on 1996 in 2007. July 1, 2016 . 16
Procurement in the World Bank Before 1998 1998-2000 2001-2017 WB Articles of Agreement (Art. III, Corruption definition introduced in Between Paris, Accra, and Busan role Section 5 (b); and IDA V 1 (g) ) 1996, as cause for misprocurement - of procurement evolves from aid AC emerged as key theme after effectiveness, to development ICB gradually introduced, starting in “cancer of development” ‘96 JDW effectiveness, to critical contribution 1951, as default method speech and subsequent to effective institutions Alternative methods emerge during establishment of INT More than 5,000 people and 100 the ‘80s (NCB, Shopping) countries visited over two years of Ex-post review and model documents consultations Procurement Roundtable, and introduced during the same time successors (Procurement JV, and In February 2014, IAD Efficiency CPAR also introduced in mid ‘80s, Procurement Task Force, led by the Review recommends sharper risk and mandatory in 2002 (not currently) WB, produce several good practice strategic focus for prior reviews papers and MAPS, as a work stream By FY05 all borrower have had at least Phase I “A proposed new under the Paris Declaration System) one CPAR Framework” approved in 2013; the SBDs become mandatory in 1993 Procurement Framework in Approved in July 2015 , and becomes Unsuccessful Country Systems Pilot Progressively detailed Guidelines effective on July 1, 2016. (FY09/10) – key reasons are (’61;‘64; ‘77; 97; 99; ‘04; etc.) “equivalency” requirement and too GGP-SIP Strategy; transformational Wapenhans Report in 1992 identifies complex engagements; MDTF in FY17 procurement as one of the core services that needs improvement MAPS updated (aligned with modern approaches, consistent with PforR approved in October 2012, 1997 strategic compact almost Framework, and including modules moves focus on performance and doubles number of procurement on topics such as agency level outcomes specialists assessment, sustainable Staff is progressively decentralized (in procurement, professionalization, FY13, 225 staff in 68 COs) etc.) Procurement Companion Piece to GAC update in 2013 proposes a Plan is adopted in ‘98 to balance On to implementation and moving principle and performance-based approach between fiduciary function the “frontier” faster to help solve approach, and fit-for-purpose as and development objectives of complex operational issues and link 17 enabler for value for money procurement more strategically to the Bank’s key objectives and agendas
Corruption and Procurement – Affecting Different Steps Procurement Planning Procurement Preparation Advertisement Pre-qualification Bid Evaluation and Award Contract Implementation 18
19
How does Governance contribute to the Bank’s goals? Second, design and implementation First, Assessing the underpinnings of of public policies governance malfunctions and enablers Understanding governance Poverty malfunctions: reduction -exclusion -capture -collusion Effective policy design and implementation Understanding Shared governance prosperity enablers: -trust -legitimacy -cohesion 20
Systemic action and evaluation Invest in Monitor, institutions and evaluate and get the right take an action incentives Identify the Corruption is not political and only about bribes socio economic environment Sanction and Cut the red punish tape corruption Power of the people, data and technology 21
22
23
24
Enforcement
27
Recommend
More recommend
