Corruption risks in public procurement through the COVID-19 pandemic in Europe

Corruption
Big Data
Public Health
Authors
Affiliations

Mihály Fazekas

Central European University

Alfredo Hernández Sánchez

Barcelona Institute of International Studies

Aly Abdou

Government Transparency Institute

Daniel Kofrán

Government Transparency Institute

Published

May 15, 2023

Doi

https://www.govtransparency.eu/global-public-procurement-open-competition-index/

Abstract

The COVID-19 pandemic has been a major emergency globally, requiring rapid responses to protect citizens’ health and lives. In order to inform future emergency policies, this paper sets out to track the corruption risk impact of the COVID-19 pandemic and the policies implemented to tackle the pandemic. We adopt a mixed-methods approach, looking at the impact of COVID-19 on corruption risks in public procurement using both quantitative and qualitative methods. In the quantitative part of the study, we rely on large comprehensive data sets (Big Data) on public procurement contracts from several European countries. Subsequently, we explore four cases which represent different approaches taken by governments in Europe to tackle the challenges posed by the pandemic. These case studies, alongside the quantitative analysis, illustrate the impact of enacted COVID-19 policies on corruption risk outcomes and their interaction with pre-existing risk levels and overall institutional strength.

We found an immediate rise in corruption risks in the early stages of the pandemic, as was largely expected given the unprecedented, wide-ranging and fast paced events, as well as the corresponding exceptional spending to acquire medical products as quickly as possible across different categories of products, only some of which were related to fighting the virus. We found that public procurement spending on COVID-19-related goods and services increased across the continent and resulted in an increase in corruption risks, as normal competition and supply mechanisms were largely set aside by both market forces and the implementation of emergency rules. Similarly, we also found evidence that these corruption risks spilled over from COVID-19-specific products to general health-related procurement.

Based on our findings and prior literature on what works in containing corruption in emergency procurement, we outline the following policy recommendations:

  1. Strengthen ex-post controls of emergency spending.
  2. Ring-fence emergency responses and the corresponding weakening of corruption controls to specific product groups affected and the period impacted by the crisis.
  3. Limit the scope of emergency policies to the necessary level.

Key figure(s)

Figure 1. Procurement Corruption Risk in Europe (TED data)

Citation

Fazekas, M., Hernandez Sanchez, A., Abdou, A. and Kofrán, D. (2023). Corruption risks in public procurement through the COVID-19 pandemic in Europe. GTI-WP/2023:03, Budapest: Government Transparency Institute.