Public Procurement: The Achilles Heel of Good Governance

Development aid is defined as the financial aid given by governments and agencies to support the economic, environmental, social, and political needs of developing countries. With the government acquisition of goods, civil works, and services representing between 15-20 percent of Gross Domestic Product (GDP) for most countries, the value of procurement policy and its application are very high. Recent high profile cases in the news, ranging from the military purchase of clothing from foreign sources that raise human rights issues, to the criticism of the implementation of the Affordable Care Act website, to a range of corruption cases around the world, are bringing policymakers’ attention to a field traditionally treated as equivalent in notoriety to the plumbing and wiring of government facilities. These cases, however, illustrate the range of objectives that public policy now places of the public procurement of goods and services, and the need for a broader dialogue. Reforms worldwide are being discussed through the World Trade Organization (WTO) Government Procurement Agreement and the European Union as well as by the multilateral development institutions. Underlying these reforms is a tension between a rules-based system with limited, if any, discretion to avoid fraud and corruption versus an outcome based focus that requires greater use of discretion and judgment to ensure better adaptation to circumstances. The lecture will focus primarily on the public procurement debate for development aid; but the issues have a resonance well beyond developing countries