Corruption in Public Procurement

Master's Thesis from the year 2018 in the subject Economics - International Economic Relations, grade: 1,0, Wiesbaden University of Applied Sciences, language: English, abstract: Corruption erodes the functioning of a state's essential organs, meaning its political, economic and social structures, and causes its norms and values to deteriorate, but more severely, it ultimately weakens the heart of good governance - the most feared enemy of corruption.

Weakened by this disease, the state, however powerful its systems, becomes more vulnerable and exposed to a great variety of risk factors while the malicious disease increasingly thrives, spreading through the organism and capturing the state, trapping it in a vicious circle. There is no country that is immune to this disease. Whether on the local, national or international stage, corruption wreaks its destructive work at all political, economic and social levels.

Public procurement embodies a large, if not the largest part of national economies. Every year, trillions of dollars are deployed for the acquisition of goods, services and works, ranging from those intended to serve basic needs such as education or public health services to those destined for giant infrastructure projects; the latters', large budgets make them tempting targets for corruption, which is often shielded behind the complicated and opaque procurement process. This results in wasteful spending, transforming public procurement, a powerful instrument for the promotion of prosperous economic development, into a harmful growth inhibitor. Public procurement belongs to the group of government activities that are worst affected by corruption. Corruption, seen as a key governance challenge, puts a detrimental strain on the functioning of a sound public procurement system. A public procurement system affected by corruption suffers from a wide range of symptoms; for instance, the quality of public projects may be reduced and public funds may be diverted from projects that are essential for the achievement of social and economic goals, resulting in rising poverty and inequality. Even worse, corruption undermines the rule of law and erodes public trust and confidence in public bodies and in the market, ultimately impeding economic growth and development.

Why and how does corruption enter the sphere of public procurement?
Why is it essential to combat corruption and how can this phenomenon be mitigated in the context of public procurement?
The research objective of this thesis is to give answers to these questions.