Civil Society Engagement: myths and realities.
A case from the Integrity Pact experience.
Eduardo Bohórquez
and
Transparencia Mexicana
Juanita Olaya
Transparency International –
Secretariat
Transparency International
November 2003
www.transparency.org
Overview
• The case for Civil Society involvement in preventing
corruption in public contracting
• Civil Society’s involvement: myths and limits
• Practical Implications for policy makers and CSOs
The impact of corruption
in Governance
• Could the government be trusted for the decisions
they are making?
• Was the final outcome of these decisions altered by
the procurement or contracting process?
• Were fiscal resources spent wisely?
• Is the Government trusted to do anything about
(against) corruption at all? And then on, on other
issues?
The case for CSOs involvement in
preventing corruption in public contracting:
The cost of corruption from
the citizen’s and firms’ perspective:

On average, households paid USD $9.50 for each bribe

On aggregated figures, this accounts for USD $2.3 billions (23,400 millions of
pesos) in petty corruption

Households in Mexico use 6.9% of their income just for bribes

Households in Mexico under one minimum wage use 13.9%

Firms worldwide: percentage of the contract value typically offered in unofficial
payments when firms (in your industry) do business with the government:
between 5% and 10% (WBES2000 Survey).

Firms worldwide: more than 80% of the firms pay up to 25% of their revenue
per annum as unofficial payments to government officials. (WBES2000 Survey).
How harmful is corruption
in Public Contracting?
• It has been estimated that about 68% of government
expenditure (world average) turns one way or
another into contracts (e.g. on a yearly basis, the
Federal Mexican government participates in more than
15,000 – 20,000 public procurement processes).
• Experts estimate that corruption can add up to 25%
to the costs of contracting.
• Low levels of trust in government: procurement and
contracting are important sources of social distrust.
• Citizen’s needs: unattended.
Is there a role
for Civil Society in Procurement?
• An opportunity to attend unforeseen consequences of the
law and to act accordingly
• An independent facilitator to the contracting process or
procurement law enforcement
• A final chance to directly address the loopholes of the
contracting or procurement laws
• A source of support and sustainability for public policy
• A tool for conflict management and good policy
implementation
• CSOs can contribute in bringing balance vs. powerful
stakeholders.
Civil Society‘s involvement
The benefits
• Safeguarding integrity, but much more relevant, trying
to restore trust in public institutions
• Allows civil society and public opinion to understand
the rationale behind a public decision
• Provides an open discussion about the quality of the
public decision
• A third party is conscious about the output of a
procurement process but also about the final outcome
• Preventive role
• Helps important initiatives to survive government
change
IP: the model and some results
• The model:
– Collaborative: public sector, private sector and Civil Society
– Based on political will
– Explicit agreement: levels the playing field, facilitates law
enforcement, facilitates acces to information
– Creates monitoring role
• Current application
– Different versions retaining essential elements worldwide
(aprox 12 different countries) on more than 100 contracting
processes.
– Assesment on its way
IP: the model and some results
Reported impact, some examples.
•
Savings. For example:
– Colombia technological turnaround of the -Banco Agrario- ( 2002), finished with an
awarding price 30% below the budgeted price
– Pakistan: K-II Greater Karachi Water Supply Scheme (2001-2002) the Karachi Water and
Sewerage Board (KW&SB) included the application of the IP concept in the contracting
process for consultants.
•
Trust. When losing bidders say: “we are unhappy that they lost, but know we lost fairly”
•
Sanctions. In some countries, companies have been blacklisted for violating the Pact. (
i.a. Italy, Korea)
The Myths
•
Civil Society engagement is
1. The panacea
2. An Unncessary hassle: pandora box for intruders
3. Another word for lobbying
4. Is Not-Civil or Not-Society
•
We all know what Civil Society is
•
Civil Society is the same everywhere
The Limits
• Unbalanced interests, the direct output (a winner) vs. the
final purpose and outcomes.
• An “early warning system”, like civil society monitoring in
public procurement, is not a permanent solution for a
problem: room for future legal reform.
• The importance of keeping a comprehensive approach to
government’s overall operation.
• When engagement backfires: misunderstanding civil
society, enforcing prejudice and exaggerating limitations.
• Daily life is difficult enough: understanding priorities and
transaction costs.
The Limits
• What do we MEAN by Civil Society? Definitions and
approaches vary from country to country.For example
– Arab world: limitations to freedom of speech and association,
local-type organizations, non/representativeness, no tax
payers. Is there a Civil Society?
– Eastern Europe: government was too big? Distrust in law,
government and institutions..who trusts who?
– Asia: role of ethnicity and religion.
• The test: what stakeholders are not having a voice in the
process but do have a say in it?
Practical Implications
• The role of political will and firms‘ social responsibility:
without it, it does not happen.
• The difference between power and authority: losing power
may give authority and thus give more power afterwards.
• Technical capacity on all sides is crucial at making
participation productive and constructive.
• No news is good news: success is not appealing to the
Media.
• Local dynamics are wiser.
• International civil society also exists.
• A different sense of government: balanced involvement,
cannot serve as an excuse to postpone Govmt. Reform.
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