The Corruption Cost Tracker: Quantifying the costs of corrupt contracting and the savings to be made from reform

Fazekas, M., Dávid-Barrett, E., Abdou, A., Basdevant, O.  (2020). The Corruption Cost Tracker: Quantifying the costs of corrupt contracting and the savings to be made from reform. GTI-R/2020:02, Budapest: Government Transparency Institute.

Public procurement constitutes about one-third of government spending or 13 trillion USD per year. It is highly vulnerable to corruption with estimates of losses amounting to 10-20%. Corruption in public procurement can lead to: 1) Overpriced public procurement contracts contributing to larger budget deficits. 2) Unfinished, sub-standard delivery or lower than contracted quantity leading to the need for further public expenditure or lost revenue. 3) Adverse impact on growth through lower efficiency of public investment, lower quality of public services and higher volatility in markets with substantial public presence.

With Covid-19-related spending largely channeled through procurement systems, tackling corruption has become even more important. However, identifying where corruption takes place and prioritizing impactful anti-corruption policies is notoriously difficult.

Our global intelligence tool, the Corruption Cost Tracker (CCT), builds an evidence base about where corruption risks lie in public procurement, their costs, and the benefits of reform in terms of savings. The Corruption Cost Tracker is an interactive online tool, with dashboards for Corruption Risk Analysis, Spending Analysis, Efficiency Gains and Policy Scenarios. Each of the dashboards allows users to undertake their own analysis in these areas by comparing sectors, regions, years, and buyer types.

The CCT will assist national authorities, the staff of the IMF and the World Bank, and the relevant civil society organisations in identifying priority areas for governance and anti-corruption reforms. In particular, the CCT can help inform these reforms by providing a granular identification of where public procurement in a given country is the most vulnerable to corruption, and what are the potential gains to be expected from reforms.

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