Where procurement is an essential feature of governance, it's in the constitution

The articles below are posts in the World Bank blog.

Morocco: When Governance, Transparency, Integrity, Accountability, & Public Procurement Entered the Constitution by Laurence Folliot Lalliot

Morocco has joined the very small list of countries (i.e., South Africa and the Philippines) to grant a constitutional status to this rather technical field, the impact of which will be progressively felt in the world (even outside the small world of procurement lawyers), as it affects how government money is converted into goods and works like roads, schools, vaccines, etc.

Proclaimed by the Preamble and woven throughout its articles, Governance and governance topics including access to information, transparency, integrity, anti-corruption, accountability, and social participation (notably through a right to petition), are paid an unprecedented tribute in the new Constitution. Such topics, which are considered recent features of good governance, are usually prescribed at the lower level of ordinary laws or regulations. However, with their inclusion in the Constitution of Morocco, they now enjoy a preeminent status that supersedes any potential contradictory law or regulation. Beyond being a symbolic gesture with potential profound legal implications, this will change the dimensions of the debate on Governance by expanding opportunities for improvement (e.g., facilitating a dialogue on social accountability with the Government).

The new provisions such as the one promoting access to information will mirror international best practices in procurement laws which require the publication of all procurement documents on a free website. The procurement process will be impacted by the provision granting the right to challenge any administrative decisions before the Administrative Courts. Another provision addressing the principle of free competition could help ensure all bidders are allowed to compete without discrimination. And on the topic of integrity of public management, public procurement and the administration of public contracts were considered important enough to earn their own article (article 36):

“Offenses relating to conflicts of interest, insider trading,and all offenses of financial nature are sanctioned by law. Public authorities are obliged to prevent and punish according to law, all forms of delinquency related to the activities of government and public bodies, to the use of funds they manage,to the award and administration of public procurement contracts. Trafficking of influence and privilege, abuse of dominant position and monopoly,and all other practices contrary to the principles of free and fair competition in economic relations are sanctioned by law. There shall be installed a National Integrity and Anti-Corruption Agency.” (Free translation from Lalliot.)

Considering the demands for transparency, integrity and accountability which helped serve as the foundation of the “Arab Spring,” we may assume the practice of including Governance topics and public procurement in the Constitution may be expanded outside the Moroccan borders and considered by other Constitutional Assemblies in Tunisia, Egypt or Libya. This would not be surprising given the growing consensus that transcends political affiliations to install ethical and accountable public functions under the scrutiny of the civil society. Perhaps as we look back at this time in the years to come, the inscription of government spending and purchases on the frontispiece of a country’s primary legal document shall become an emblematic testimony of this new era.

Would you agree with one comment that this is mere window dressing? If so, you have no hope, and are probably wasting your time reading blogs such as this.

Procurement Monitoring by Citizens: Is it Effective? by Sabina Panth

According to the International Budget Partnership, developing countries spend $820 billion a year on procurement-related transactions. These expenditures are critical for the delivery of goods and services but they are also extremely vulnerable to corruption. Transparency International estimates that $400 Billion is lost to bribery and corruption in public procurement internationally (2006). Procurement monitoring is an emerging area, where citizens’ involvement has been experimented to address the impending waste and corruption in public procurement.

The procurement process typically consists of identifying what is needed; determining who the best person or organization to supply this need is; and ensuring what is needed is delivered to the right place at the right time and for the best price and quality. Some loop holes that offer room for manipulation and fraud in procurement consist of:

Planning stage: Absence of clear criteria for project selection; stimulating demand for personal benefits; short cutting bidding process by misrepresenting urgency
Preparation Stage: Weak technical specifications leading to favored bidders; lack of public participation in project design/bidding specifications, tailor fitting favored bidders
Advertisement Stage: Limited/insufficient advertising; published in paper with limited circulation
Pre-qualifications: Bias requirement to a favored bidder or contractor, lengthy process leading to opportunities for bribe solicitation, contract sharing among the bribing companies

Integrity Pacts and Public Hearings are some tools that have been used to engage civil society in procurement monitoring. In a public hearing, the responsible authority convenes a meeting with citizens and subject experts to discuss the planned terms of a contract and citizens in turn express their objections and suggestions for improvements. In Integrity Pact, the responsible authority and business agencies competing in the bidding share a contract of reciprocal control to prevent the payment of bribes between the bidders and the authorities. This allows control mechanisms for the citizens and also the losing bidders to monitor how the winning bidder addresses the terms of the contract. Citizens are also able to make use of the grievance redress provision in the contract to report cases of complaints and dissatisfaction during the implementation phase.

For meaningful participation of citizens in procurement monitoring, it is important to first identify key stages of procurement where civil society and government can collaborate. Equally important is to make information on procurement processes accessible to the general public. This will help avoid hand-picking of individuals and organizations in the formation of monitoring committees or participation in public hearings. Also, civil society needs proper incentives, including trained manpower and sufficient budget to participate in procurement monitoring. Given the entrenched corruption in procurement handling and the association among stakeholders involved in the process, civilians are not always in a position to resist threats and manipulation. However, there are some cases, where civil societies have cultivated home-grown solutions to effectively engage in procurement monitoring and influence policy changes.

I'm not sure how far the concept of citizen participation can effectively go. To the extent it allows citizens to see the guts of procurement and the way the procurement sausage is made, I'd agree. And, from the discussion in the article, it is this monitoring that is emphasized.

But if extended to citizen participation in selection of projects and contractors, procurement could end up being no different than corrupt procurement, which is discriminatory procurement for the benefit of some, even if a majority, at the cost of the society as a whole.

When people criticize democracy as a model of governance, they exaggerate or see only the majority rule aspect (which is fundamentally mob rule), and disregard entirely the equally essential minority rights aspect (that is, government by consent). As the first article alluded to, good procurement is good governance, and good governance requires good procurement. A failure of one is always reflected in a failure of the other.

Read more of each article featured at the article title link.

Feel free to comment, but please keep comments civil. (Since there's only ever been one comment, that has not been a problem in this blog.)