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Many developing countries can improve public services through fair and open procurement practices, says WBG report

November 18, 2015

WASHINGTON, November 18, 2015 – Private companies continue to face considerable obstacles, linked to transparency, efficiency and other ills of government procurement systems around the world, a new World Bank Group report finds.

Such obstacles negatively affect the ability of small and medium sized private sector firms to do business with governments, says the Benchmarking Public Procurement (BPP) 2016 Report, which assesses public procurement regulatory systems in 77 economies.

The public procurement market, globally, is estimated at around US$9.5 trillion each year. Of this, developing countries spend an estimated $820 billion a year worth of citizens funds, about 50 percent or more of their total government expenditure, on procuring goods and services that range from food grains for welfare programs for the poor to wiring for electrical grids that power homes and businesses.

“Public procurement is critical in improving lives and livelihoods when carried out in an efficient and transparent manner. Public procurement, if it is well done, can be a powerful catalyst for improving economic performance and can play a strategic role in delivering more effective public services,” said Augusto Lopez-Claros, Director of the World Bank’s Global Indicators Group, which produces the report.

Of the economies covered by the report, the vast majority around the world are using online platforms to advertise their purchases of goods and services, but often the websites provide little information to prospective suppliers. Furthermore, less than half of them allow bidders to submit their bids electronically. 

“Procurement practices that are transparent and efficient benefit all stakeholders. Governments get the best value for money, the private sector thrives and creates jobs, and citizens receive better quality public services. This can help reduce poverty and promote all-round prosperity,” said Federica Saliola, lead author of the report.

The Benchmarking Public Procurement (BPP) 2016 Report was launched at an event hosted by the U.S. Chamber of Commerce in Washington D.C.

About Benchmarking Public Procurement

Launched in 2013 at the request of the G20 Anti-Corruption Working Group, Benchmarking Public Procurement provides comparable data on regulatory environments that affect the ability of private companies to do business with governments in 77 economies. Benchmarking Public Procurement builds on internationally accepted good practices and principles and captures elements that matter to private suppliers around two thematic areas:

  • The Public procurement life cycle topic which covers the four phases of public procurement ranging from preparing and submitting a bid to the system for managing contracts.
  • The Complaint and reporting mechanisms topic which covers the ease of challenging a public procurement tender through a complaint system as well as reporting misconduct and conflicts of interest.

This year’s report marks the 2nd edition of the Benchmarking Public Procurement report series. For more information about the project and to access the accompanying datasets, please visit https://bpp.worldbank.org

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