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corruption

Which features of procurement systems increase competition and reduce corruption?

Steve Knack's picture

Public procurement of services, works and supplies is estimated to account for 15-20% of GDP in developing countries, and up to 50% or more of total government expenditure. Efficient and effective procurement is vital to core government functions, including public service delivery and provision of infrastructure. Weaknesses in procurement systems can lead to large-scale waste of public funds, reduced quality of services, corruption, and loss of trust in government.

How corruption hurts innovation in smaller firms

Caroline Paunov's picture
Firms invest in innovations if they expect future benefits from these investments. Patents and quality certificates are means for firms to claim such exclusive gains. However, in order to obtain quality certificates and patents for innovations firms have to apply to the accredited national institutions. If national officials ask for bribes in exchange of dealing favorably with applications, then the costs of engaging in innovation rise and possibly stop firms from innovating.