Overcoming Corruption and War -- Lessons from Ukraine's ProZorro Procurement System

Abstract

After the 2014 uprising against widespread corruption under former Ukrainian President Victor Yanukovych, a group of civic activists and data experts decided to overhaul government procurement. Their efforts produced an open-source e-procurement system, ProZorro (“transparency” in Ukrainian), and a community of citizens and government buyers, Dozorro (“watchdog” in Ukrainian), that analyzes contracting data, flags high-risk deals and irregularities, and reports them to government authorities. Created with the help of the European Bank for Reconstruction and Development and the U.S. Agency for International Development, ProZorro has helped Ukraine save almost $6 billion in public funds since October 2017, according to the December 2021 U.S. Strategy on Countering Corruption.

Resilient in the chaos of war, ProZorro offers many lessons. It offers technical insights useful for any procurement system. For example, in many ways it is more transparent, and better integrated with commercial marketplaces, than the U.S. system. ProZorro also shows how important transparency can be to the strength and integrity of a procurement system. Finally, the system’s sheer endurance – it continues to flourish in the face of a violent attack from Russia – teaches volumes about the patriotism and dedication of those procurement officials behind the ProZorro system.

ProZorro was born of many Ukrainians’ intense frustration with a closed and corrupt system of procurement. Launched as a private effort and then adopted by the Ukrainian government, the system was built on principles of impartial decision-making and transparency – key ingredients to any post-Soviet reform. Despite Ukraine’s broader slide back into corruption after its 2014 revolution, ProZorro has persisted as a highly successful tool against corruption, as a means of broadening businesses’ participation in government procurement, and as a reminder of transparency’s importance in reinforcing confidence in government.

Keywords: Electronic procurement, corruption, Ukraine

JEL Classification: H57, D73