-Jointly submitted by Kashmira Daruwalla and Tanya Gupta
Experts have identified procurement as one of the areas most prone to corruption in the public sector. Corruption in public contracting can take many forms, including bribery, deception (fraud) or simple abuse, affects the efficiency of public spending and donors' resources and creates waste. Corruption is widespread in public procurement and service delivery programs. In a study in Uganda, Reinikka and Svensson compared central government data on public grants to schools from a survey of school officials to find what fraction of grants were ultimately received by schools. They found that schools received only 13 percent of central government spending on the program, over the period 1991–1995. Most schools received nothing and the evidence suggested that most of the funds leaked out of the public system through procurement fraud.
In a different randomized field experiment in Indonesia, Olken found that 24% of the funds for a road project had been stolen, after comparing reported expenditure and actual expenditure.
