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International Handbook on the Economics of Corruption, Volume Two

International Handbook on the Economics of Corruption, Volume Two

Elgar original reference

Edited by Susan Rose-Ackerman and Tina Søreide

A companion volume to the International Handbook on the Economics of Corruption published in 2006, the specially commissioned papers in Volume Two present some of the best policy-oriented research in the field. They stress the institutional roots of corruption and include new research on topics ranging from corruption in regulation and procurement to vote buying and private firm payoffs.

Chapter 5: A Fighting Chance Against Corruption in Public Procurement?

Gustavo Piga

Subjects: economics and finance, economic crime and corruption, law - academic, corruption and economic crime, law and economics


Gustavo Piga1 ‘When I use a word’, Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean – neither more nor less.’ ‘The question is’, said Alice, ‘whether you can make words mean so many different things.’ ‘The question is’, said Humpty Dumpty, ‘which is to be master – that’s all.’ (Through the Looking-Glass, and What Alice Found There, 1871, Lewis Carroll) 1. Introduction Public procurement is said to account for between 15 and 20 percent of the GDP of most countries.2 The allocation of these funds brings to the fore a vast array of interests, both over specific tenders and also over broad national and supra-national legislation regarding procurement.3 Those interests are often said to be non-benevolent, that is, prone to generate corruption, in both poor and rich countries. Economic and social development is not sufficient to eradicate corruption. Why is the battle against corruption in public tenders an ongoing problem that weakens the credibility of institutions and governments at all levels of development?4 One possible answer is to note that ‘transparency’, the instrument most widely used in the war against procurement corruption, does not generate the right incentives to avoid improper behavior. The Recommendation of the OECD Council on Enhancing Integrity in Public Procurement contains 10 principles to enhance integrity in public procurement. Principle number 2 sums up quite well the concept of transparency: ‘governments should provide clear rules, and possibly guidance, on the choice of the procurement method and on exceptions...

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