Many Bank-financed projects, especially those implementing large and complex contracts continually face high risk of implementation delays, and procurement is the most frequently used scapegoat.
What has gone wrong in those cases?
At the onset, borrowers are requested to prepare a detailed procurement plan for the first 18 months of project implementation, which is carefully reviewed and approved by the Bank before loan negotiations and the projects are then declared "good to go."
But the reality is almost never that rosy.
Procurement is an essential aspect of World Bank operations and international development projects worldwide. The World Bank’s policy on procurement encourages the use of country systems in procurement implementation process while ensuring the consistency with the Bank’s regulations .
Making procurement information publicly available promotes openness and transparency and creates a level playing field for bidders. This, in turn, fosters competition and potentially decreases corruption risks.
With this in mind, World Bank teams in East Asia and the Pacific successfully collaborated with government procurement agencies to increase and improve the publication of procurement information and to pilot e-procurement portals for Bank-funded operations.
The following story shares our experiences and successes in both China and Vietnam.
Inclusion is the new buzzword in international development. From promoting citizen empowerment to fostering pathways out of fragility, it is all about political processes that are more inclusive and representative.
The newly adopted Sustainable Development Goals are perhaps the most ambitious articulation of this consensus, with Goal 16 in particular calling for building more “effective, accountable and inclusive institutions at all levels”.
And there are good reasons for this call-out. Two findings from research that I undertook for a paper I wrote recently on Political Settlements and the Politics of Inclusion are particularly striking in highlighting the centrality of inclusion:
As part of the Bank’s ongoing effort to adapt to the changing needs of client countries, the Bank is modernizing its procurement framework. This will help us deliver stronger project results while maintaining the integrity and high standards of our procurement framework.
The two key elements of this transformation in Bank procurement involve the Procurement Policy Reform, to take effect in 2016, and STEP, the Bank’s new electronic procurement planning and tracking platform.
On July 21, 2015, the World Bank’s Board of Executive Directors approved the new Procurement Framework, which will go into full implementation during 2016. This new framework allows the Bank to better and more effectively meet the varying needs of clients by ensuring greater flexibility and choice of methods. Alongside the new framework, an electronic platform, Systematic Tracking of Exchanges in Procurement, branded as STEP, is being rolled out and will be implemented worldwide in the coming months.
This system jointly developed by Operations Risk Management (OPSOR) within Operations Policy and Country Services (OPCS), the Global Governance Practice (GGP), and Information Technology Services (ITS) departments, is a cornerstone of the World Bank Group’s procurement reform efforts and goes hand-in-hand with policy and procedural changes.
. And that’s just a start.
The use of data and technology in procurement make it possible for governments to make informed decisions to maximize development impact. At the World Bank, the Public Integrity and Openness Practice is developing a set of Transformational Engagements, one of which focuses on Data Analytics, to catalyze better outcomes from procurement processes.
The engagement will use data analytics to solve pressing developmental problems. The plan is to combine work on addressing common data problems (how to digitize paper records, how to link different data records, how to present data findings in ways that are accessible and influential) with efforts at the country level. Powered by advanced data analysis, countries can undertake empirical-based examinations of when best value is achieved via procurement, or in which cases and sectors government contracting is promoting the development of competitive and dynamic private sectors.
Work undertaken within the Bank will be informed by the concurrent efforts of others who are exploring different approaches and different techniques to using data and data analytics to drive improved performance. The World Bank seeks to play a constructive role within a community of initiatives to harness the power of information to change how governments function, the relationship between government and non-governmental actors, and the lives of people. Committed to an inclusive process of learning-by-doing, the World Bank is dedicated to building partnerships with researchers, government officials, the private sector, and civil society.
- The World Region
- Public Sector and Governance
- Private Sector Development
- Information and Communication Technologies
- Open Governance; Open Data; Public Finance Management; Public Procurement; Information and Communication Technology; Public Integrity and Openness Practice; Transformational Engagements; Data Analytics; Private Sector Development; Citizen Participation
With the support of the World Bank, the Government of Vietnam is making strides in addressing fraud and corruption risks in the management of development loans more broadly than before. Thanks to a new strategic action plan that cuts across the national, sectoral, and project levels.
The World Bank’s Governance Global Practice is working with the government of Vietnam to design and implement this new strategic action plan on how to make the management of Official Development Assistance (ODA) loans less liable to fraud and corruption. As a result, a healthy public policy debate around the risks surrounding ODA loans and how best to address them has arisen in Vietnam, as shown by the last session of its National Assembly in 2014.
Managing large civil works contracts can be a challenge.
In Vietnam, while most large infrastructure projects are financed by multilateral and bilateral development partners under the form of Official Development Assistance (ODA), their implementation is contracted out and often delayed by cost overruns and quality concerns.
Whenever aid and development money is involved, one question consistently emerges: How do you make sure it does not fall on the wrong hands, and be victims of fraud and corruption? This is a question that the World Bank country team in Vietnam and elsewhere has been grappling with. How do we ensure that financing for World Bank projects actually goes to its intended purposes and supports the ultimate goals of eliminating extreme poverty and boosting shared prosperity?
World Bank country staff in Vietnam realized that previous responses to fraud and corruption have focused too narrowly on individual projects. What are the factors that cause and perpetuate fraud and corruption in the first place? They needed to sufficiently address the root causes of the problem, and not just the symptoms. Despite greater awareness and more open debate about corruption in Vietnamese society, there's no evidence that allegations of fraud and corruption have decreased in the last several years.
To nip the canker in the bud, the Vietnam country team is developing a Strategic Action Plan to Address Fraud and Corruption Risks. The plan identifies broad areas of fraud and corruption concerns, categorizes them, and proposes measures and activities for mitigation. Teams across different World Bank units called “Global Practices” have come together to mainstream and implement the plan into core operations.
Vietnam spends an estimated US$25 billion in goods and services each year. Recognizing that an efficient public procurement system is essential to delivering quality public services in a timely manner, the Government has set a mandate to professionalize the public procurement function.
After donors released a pair of studies in Vietnam last month, an interesting internal discussion ensued. Although the reports dealt with fairly “sensitive” issues—corruption and transparency in land management—both were welcomed by counterparts in government.