Corona und Korruption: Auswirkungen des Pandemiemanagements auf die öffentliche Vergabe
Korruption in der öffentlichen Auftragsvergabe hat im Zuge der Coronakrise zugenommen − zu diesem Ergebnis kommt eine Studie von Prof. Eva Thomann (Universität Konstanz), Federica Marconi (Università degli Studi di Roma Tor Vergata) und Asya Zhelyazkova (Erasmus Universität Rotterdam). Das sei die Folge unklarer Regeländerungen, mangelnden Wettbewerbs und einer politisierten Verwaltung.
In der 98. Ausgabe des Scheinwerfer-Magazins finden Sie dazu einen gekürzten Gastbeitrag in deutscher Sprache. Den ausführlichen Beitrag im englischen Orginal lesen sie hier.
Did policy responses to the COVID-19 pandemic trigger corruption in public procurement?
Summary: The COVID-19 pandemic caused a dramatic relaxation of public procurement rules in order to purchase the equipment necessary to protect the public. As an unintended side effect, we have seen an increase in procurement-related corruption both in Germany and in Italy, a recent study finds. What contributed to this increase was the ambiguity of the rules, the lack of competitiveness of procurement procedures, and the pervasive influence of political actors on the public administration.
Challenges for public procurement at the outset of the pandemic
The COVID-19 pandemic presented an unprecedented, massive challenge for public procurement in its early stages in Spring 2020. For example, huge amounts of face masks had to be procured very quickly in order to protect the population. However, supply was short and so was time. On 11 March the World Health Organization called on governments all around the world “to activate and scale up emergency response mechanisms” to meet the demand of personal protective equipment, medical devices and other goods. In April 2020, the European Commission recommended to facilitate procurement efforts for a coordinated European pandemic response through accelerated procedures, negotiated procedures without prior publication, and abandoning competitive tendering in urgent situations. Most member States reacted quickly to remove unnecessary burdens, relaxing and simplifying their domestic public procurement regulations. The regulatory simplifications were necessary to ensure an effective and swift crisis response, but they also drastically lowered core international public procurement standards: transparency and integrity, equal competitive access, equal treatment of businesses, and best value for money and efficiency.
Did the crisis and its management contribute to an increase in corruption?
In many countries, recent allegations of corruption related to COVID-19 masks and politicians apparently making money out of the crisis have shocked the public. These events fueled a debate about the integrity of public procurement and the effectiveness of anti-corruption measures in times of emergency. Even in normal times, an estimated 12.5 per cent of public procurement contracts involve some form of corruption. Public sector corruption happens when a public office (political or administrative) is misused for private gain—in public procurement, this means that contracts are steered toward a favoured bidder without detection. The health sector is especially vulnerable to corruption: in the EU, 28 per cent of health-related corruption cases are related specifically to procurement of medical equipment (EC 2013). Crises further create an environment of confusion and resource availability that may facilitate corruption.
In our research, we ask whether the crisis and related policy responses have actually resulted in an increase in corruption in public procurement. We analyze how the crisis and the policy responses have affected interactions between public and business actors involved in public procurement, and the regulatory environment in which these interactions take place. Of course, we do not expect corruption in public procurement to be wide-spread: the vast majority of public servants and politicians went above and beyond to work toward solving the crisis. However, five factors may have changed and created both opportunities and incentives for some individuals in public procurement to engage in corruption: an increase in the number of procurement contracts in the public health sector, a simultaneously decreased competitiveness of public procurement procedures, and increased leniency and also ambiguity of procurement rules, and a decreased probability for corrupt individuals of getting caught.
We compare the contrasting cases of Italy, commonly ranked as a country with high levels of corruption, with Germany, traditionally seen as a country with low levels of corruption, to identify patterns that are robust across contexts. This unpublished study conducted at the University of Konstanz, which is currently undergoing peer review, focuses on sector-specific corruption rather than general levels or perceptions of corruption that usually make up corruption rankings. Corruption is a sensitive behavior that takes place in hidden, which makes it difficult to research it. We combine different sources and methods to obtain a robust empirical picture. Legal analyses as well as large-scale data on public procurement contracts help us track how the changes of procurement rules have affected risks of corruption. An online survey of public administrations (N= 445) and businesses (N=175) engaged in public procurement procedures conducted in the summer of 2022 allowed us to empirically study the implications for perceived corruption.
Sector-specific data shows an increase in corruption in public procurement due to the pandemic
Our legal analysis shows that both in Italy and in Germany, the public procurement rules were relaxed in ways that created new opportunities for corruption. When looking at contract types that involve specific, higher risks of corruption, we equally see a clear increase in their frequency in public health related areas as a result of the pandemic.
These developments are also reflected in the prevalence of different corrupt behaviours as perceived by business and, to a lesser extents, bureaucrats involved in public procurement. According to this evidence, the pandemic has been associated with increased corruption levels in public procurement. What is striking is that there are no clear-cut differences between Italy and Germany in the increase and level of (perceived) corruption. Worryingly, current data suggests that corruption levels in this sector are similar in both countries—and they appear to be here to stay.
Rule ambiguity, low competition, and a politicized bureaucracy triggered corruption
Our analysis uncovers three main factors that contributed to corruption in public procurement during the pandemic. First, the relaxation of procurement rules itself was not the problem—and we find no change in the likelihood of corruption to be uncovered and persecuted. However, the fact that these new rules were often unclear especially to the businesses involved provided fertile grounds for bending rules. Second, the procurement procedures became less competitive in terms of the number of bidders and equal access to contracts for all qualified firms. This made it easier to hide corrupt behaviour and choose a favoured bidder who would be willing to offer a bribe. Finally, we find that the independence of bureaucracy matters: in more politicized public organizations, where politicians influence appointments and public procurement procedures, corruption levels are perceived to be higher. Our results should ring alarm bells as both in Italy and in Germany, the bureaucracy is equally perceived to be highly politicized.
The COVID-19 crisis may have led to a worsening of corruption and politicization even in countries traditionally considered to be more immune to these problems. Currently, Germany’s strategy in fighting corruption at federal level is under review by the Ministry of Interior, supposed to be completed by the end of this year. While being the exception rather than the rule, corruption in public procurement during moments of crisis has serious costs and amplifies the negative effects of crises: the public resources that land in private pockets are direly needed in order to ensure effective crisis responses and public safety. Corruption can have long-term damaging effects on the reputation of and trust in the public administration. Especially in times of crises, taxpayers should be able to expect both effective administrative coping and an efficient and targeted use of public money. Our analyses suggest that relaxing procurement rules should be done in ways that do not affect the clarity of rules, and that preserve minimum levels of competitiveness in procurement procedures. Faster and more flexible procedures should be honouring the EU principles that require transparent, public and accountable processes in order to avoid possible abuses of the emergency procedures. Digitalization of the main phases of the tender life cycle (e.g. e-Submission, e-Access, e- Invoicing) may help to reduce corruption risks. The crisis showed that both national and global efforts against corruption are required, based on shared and internationally agreed practices.