How to Reduce Corruption in Public Procurement: The Fundamentals

Abstract:     
Procurement of goods, works and other services by public bodies alone amounts on average to between 15% and 30% of Gross Domestic Product (GDP), in some countries even more. Few activities create greater temptations or offer more opportunities for corruption than public sector procurement. Damage from corruption is estimated at normally between 10% and 25%, and in some cases as high as 40 to 50%, of the contract value.

Public procurement procedures often are complex. Transparency of the processes is limited, and manipulation is hard to detect. Few people becoming aware of corruption complain publicly, since it is not their own, but government money, which is being wasted.

This document is Part I of the Handbook for Curbing Corruption in Public Procurement published by Transparency International in 2006 and its purpose is to provide an overview of the problem of corruption in public contracting. Sections 2 and 3 of the Handbook, written by other authors, offer suggestions and experiences of how this problem can be addressed. The full text of the Handbook has been made available.

Number of Pages in PDF File: 233

Keywords: corruption, public procurement, transparency, infrastructure, integrity pacts

JEL Classification: O00, O17, K42, K49, K12, K39, H57

Accepted Paper Series