Corruption in Corruption in public procurement continues to plague several developing countries across the world. Particularly, the Inter-American Development Bank (IDB) recently released a report that encompasses the toll corruption in public procurement is taking on the Caribbean and Latin America.
The IDB found that corruption in public procurement plays a significant role in the wastage of money utilized by countries in the region.
IDB reported that although it is difficult to measure the exact cost of corruption due to its hidden nature, an estimated 10–30 percent of investment in publicly funded construction projects may be lost through mismanagement and corruption.
IDB also said that the Organization for Economic Co-operation and Development (OECD) estimates 20–30 percent of project value is lost through corruption.
IDB reported that public procurement reform in the region has come a long way since the early 2000s, when it was a minor part of the second generation of public sector reforms. IDB said that the region has made more progress than other developed regions, especially in advancing their e-procurement tools.
However, IDB was keen to note that several countries in the region are still transitioning to procurement systems with better institutions, more agile processes, and a heightened capacity to prevent corruption.
IDB said that it is now very clear that reforms have not been enough to dismantle inefficiencies or eliminate corruption. The bank even said that implementing an effective public procurement system based on transparency, competition, and integrity, as called for by the United Nations Convention against Corruption (UNCAC), is not simple.
IDB said that a procurement system that lacks transparency and competition is the ideal breeding ground for corrupt behaviour.
According to the UNODC (2013), reform initiatives need to integrate these goals. While Guyana’s procurement system is considered transparent and inclusive of competition locally, it still scored lowest among 14 countries.
IDB said that a comprehensive and outcome-based procurement index is still needed but a widely used procurement indicator is the Organisation for Economic Co-operation and Development (OECD) Methodology for Assessing Procurement Systems (MAPS), which mostly measures the process against international best practice models, not procurement outputs, outcomes, or systemic performance.
Still, it portrays the current state of processes in Latin America and the Caribbean. IDB said that 14 governments in the region conducted a MAPS self-assessment of their procurement systems between 2008 and 2016. The results are ranging from zero to three with three meaning full achievement of the standards.
“For each country, MAPS presents the year implemented and the score. The results, from best to worst, were: Chile (2008, 2.7), Brazil (2011, 2.2); Ecuador (2011, 2.0); Paraguay (2013, 2.0); Peru (2016, 2.0); Colombia (2009, 1.9); Nicaragua (2010, 1.8); the Dominican Republic (2012, 1.5); Costa Rica (2015, 1.5); Honduras (2010, 1.2); El Salvador (2010, 1.2); Barbados (2008, 0.5); Belize (2010, 0.5); and Guyana (2010; 0.5).”
IDB said that according to the results, most countries still need to improve procurement processes and evidence points to poor outcomes in several countries.
IDB provided a list of key recommendations to be adapted to each Latin American and Caribbean country. The banks said that while professionalization and ex-post evaluation, monitoring, and control of the system are necessary to develop a comprehensive and effective system, there are key critical factors—planning, coverage and coordination, competition, and effective digitalization—that the region’s countries need to improve to make the system more efficient and less prone to corruption.

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