Corruption in public contracting: Change behavior, not rules

22 June 2016, by Juanita Olaya.

This post was originally published on the Open Contracting Partnership website.

The majority of corruption cases in the world involve some form of contracting. This comes as no surprise as contracts are the main vehicles to spend government’s budgets.

In my experience of years involved in researching and identifying ways to curb corruption in public contracting, I’d like to share what I believe have been the main obstacles. Lack of political will is often the first culprit. But the another reason is likely equally as important: we tend to see corruption in contracting as a technical problem, when it actually is a behavioural one.

The obvious path to address a technical problem is to insist on legal reform. Checklists, adopting standardized laws, or implementing a new e-procurement system do not suffice. Taking human behaviour out of the equation doesn’t make government less vulnerable to corruption. It just displaces the risks to other moments in the process.

In promoting these technical fixes, we have forgotten how people behave. Those interested in tweaking the system to serve their own purposes will try to do it no matter how perfect the laws. In fact, in the typical corruption case existing procurement regulation is respected. But fortunately, behavioural science can provide good examples to incentivize good behaviour as well, and to keep us away from the traps of excessive controls and cumbersome processes that only take responsibility away from where it belongs.

How do we make sure that change sticks?

We also focus too much on reform and not on sustained change. The impacts of a reform usually last as long as the applause we give reformers during our anti-corruption conferences. Once the reformers leave office, the system is vulnerable and the cycle starts all over.

We are ourselves to blame since we don’t follow up on changes initiated years ago. We look for the quick success story. This doesn’t mean we should now forget the frameworks. They remain meaningful ways to address change. But it depends on how we actually use them.

The United Nations Convention against Corruption, the largest framework regulating anti-corruption legislation globally, is a success in many ways. To date, it has accumulated 178 state parties; it has a functioning (even if well subject to improvement) review mechanism; and the often-polarized debates at the UNCAC bi-annual conferences (among them on civil society involvement and transparency) suggest the parties do take the forum seriously.

While nobody expects an international convention to single-handedly solve a problem, some positive change would be nice. Yet, reviews undertaken so far indicate only timid and piecemeal reform efforts whose real impact renders difficult to assess from review summaries.

The UNCAC also contain general but mandatory standards for transparent and competitive procurement systems. The issue is subject of attention at the UNCAC meetings even though it has not been subject to review so far. The level of the debate about procurement at the global UNCAC conference last year in St Petersbourg did show little progress compared to earlier years. It is also surprising to see that while corruption cases have not become more sophisticated, we still see blunt bribery. Partly thanks to the fact that dirty money can be laundered easily through anonymous companies.

On the other hand, we see new spaces of international governance take positive steps: the Open Government Partnership (OGP) encourages countries to advance action plans towards more open government through voluntary commitments jointly developed with civil society, which, broadly speaking, seems to be working well. The Open Contracting Partnership applies an international data standard that incentivizes government, business and civil society to be more transparent by adding value throughout the procurement cycle .

Governments join these initiatives with a different approach: a voluntary, often politically motivated, decision to act, an action plan and common goals, and some readiness to be monitored on its achievements. If you go to the UNCAC Conference of States Parties, were related regulation is being discussed, the statements and positions by government officials show little sign that they have heard of their colleague’s plans and commitments at the OGP Summit. Similarly, I wonder if, at the OGP or on open contracting, governments showcase and link the progress made under the UNCAC or sustain the same position on issues like asset recovery, beneficial ownership or civil society participation.

I see a clear gap, and therefore an opportunity.

If we make an effort to connect these fields, we can take an important step towards promoting sustained change. I would propose:

  • Let’s analyse the countries’ OGP commitments against their positions under UNCAC and the results of their reviews: are they compatible and consistent? Or not? At the UNCAC Coalition we are starting this exercise and hope to work together with many of you.
  • How can those of us active with the UNCAC and in OGP and open contracting coordinate to make sure we consistently reward sustained change and positive improvement on the same issues and raise our hands when the opposite is the case?
  • How can we take advantage of the strength of each initiative? UNCAC is strictly speaking international law, while OGP and open contracting are not. But OGP and open contracting are more dynamic and are freer from the burdens of international diplomacy. Furthermore, the UNCAC review’s second phase is about to start. While the first phase focussed on enforcement, this time around reviewers will look at prevention which includes procurement. How can for example the Open Contracting Partnership and the UNCAC Coalition cooperate and use this as an opportunity to build on each other’s effort to develop and implement global contracting standards?
  • A view of sustained change also means accepting that things can go wrong. Champions may leave the government. Other priorities emerge. It is a matter of retaining the perspective on the big picture: where is this country going? While at the same time looking at their efforts today. This view entails a cultural change in our own approach as activists. How to integrate this into a world fed with indexes and rankings?

When it comes to curbing corruption in contracting we look always to “the other” side: their (government) reforms, their pledges, and their failures. There may also be some work to do on our side to provide an environment where what we want to see is sustained – and sustainable- change. At least at the international level, that is the only way we can tackle behavior.

About Juanita Olaya

Juanita Olaya is an independent expert and activist with more than 20 years and a few wounds of national and international experience. She works with governments, NGOs, companies and international organisations on issues of governance and sustainability. She is a member and Legal Adviser to the UNCAC Coalition.