Keeping Government Contracts Clean
Monday, 20 April 2009 , Written by « OECD »   

Introduction

Could countries do more to prevent waste, fraud and corruption in government contracts? Governments and state-owned firms increasingly turn to the private sector for a variety of goods, services and public works, such as buying basic computer equipment or building roads and dams. This is a major economic activity of governments, generating huge financial flows.

Partly because of its sheer size and complexity, public procurement is one of the government activities most vulnerable to corruption. Bribery by international firms in OECD countries is more frequent in public procurement than in utilities, taxation, or the judicial system. Corrupt practices undermine competition in the market, with the result that the government pays an artificially high price for goods and services. On a global scale, millions in taxpayers’ money are lost to corruption in major public works such as building schools, power stations or stadiums for major sport events.

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