**Abstract**

Public procurement plays a pivotal role in driving economic activities. Globally and in Africa, one of the key drivers of economic acceleration is vested in the procurement of goods and services. The main objective of the study is to assess the root causes affecting the public procurement functions in key public institutions. The chapter is analytical and explores the root causes of corrupt practices globally and more specifically in the South African environment. This chapter, furthermore, highlights the need for the risk methodology approach to clearly understand why corruption in public procurement is rampant globally and in Africa, and how can measures be implemented to eliminate potential risk factors. This chapter contributes to the body of knowledge on corruption by looking at the sources of corruption through the lens of institutional inefficiency and root analysis. To answer the issue of whether traditional causes of corruption hold up in the face of strong anti-corruption regulations in globally and Sub-Saharan Africa, we complement conventional variables in modern literature with institutionally entrenched ones.

**Keywords:** public procurement, corruption, root causes, risk management, public institution, risk factors

### **1. Introduction**

For centuries Africa as a continent is confronted with the challenges such as poverty and corrupt practices. To a certain extent, the operationalization of good governance principles as an anti-dote to fight corruption in public procurement does not always achieve the desired outcomes.

Nonetheless, with the introduction of governance metrics, assessing the administrative machinery's proactivity in the fight against corruption has become easier. The motivation for involvement is defined by strong institutions, while the level of engagement is determined by the level of participation. It is equally possible that the reverse is true. Strong institutions are the source of anticorruption measures; as a result, institutions determine the scope of social behavior that is fundamentally connected to corrupt activities.

As a result, social behavior is commonly viewed as 'the rules of the game' as established by institutions [1]. The current article, which is based on this idea, highlights institutional ineffectiveness as a problem. Once an organization cannot operationalize anti-corruption measures through training, awareness and capacity building, it is proven that corrupt activities can be increased. More importantly, the social environment is crucial as it influences behavioral patterns of either anti-corruption or corrupt practices. This article reflects on the root causes of corruption on an institutional level and also highlighted measures, which be implemented to mitigate the risk factors identified.

#### **2. Literature review**

Globally, a plethora of laws and legislative instruments are available to address the root causes of corruption in public procurement. Corruption is especially prevalent in public procurement [2]. Almost all public-sector operations, from building to education, healthcare to innovation, need the procurement of commodities, services or works. However, the gap between who wins these bids during the procurement of goods and services and paying a bribe to obtain a specific bid opens the door to corruption. In this regard, the organization globally is confronted with the risk of corruption during the procurement processes of goods and services. The availability of international best practices and legal instruments does not mean countries will implement these set guidelines to create a corruption-free environment. The solution for a corruption-free environment and the management of risk processes is based on the ability to engage suppliers and implement anti-corruption processes and political will in public procurement [3].

According to the research, one of the most important underlying factors that defines corruption is historical ties, which have a significant impact on the current administrative and political environment. Among these, the philosophy of the legal system appears to have practical relevance in current times. Existing legal rules, according to the notion, always impact the quality of governance, especially the amount of corruption control. Countries that have been colonized in the past, in one manner or another, are likely to have had their legal codes heavily affected by their colonizers. According to [4], the genesis of common law legal codes may be traced back to historical antecedents, which primarily track the attempts of property owners to restrict the discretionary authority of the king. Corruption is a multifaceted problem with far-reaching consequences that are closely tied to economics, history, sociology, public administration and political science. As a result, defining corruption precisely and comprehensively is challenging. Corruption is described as 'using public office for private gain' [5].

La Porta et al. [6], also contend that legal systems in nations that have embraced the OCED guidelines relate to measures to curb corruption. The primary aim of OECD guidelines and frameworks for countries is to improve good governance, adherence to the rule of law and reduced levels of corruption [7]. Understanding the structural connections between corruption and fundamental causes lays the groundwork for integrated approaches to resolving both processes. Corruption has a well-documented negative influence on fragile societies, as well as state-building and peacebuilding in many countries and thereof it is imperative to approach corruption in public procurement holistically. Corruption is both an underlying cause and a driver of public procurement procedures, and if not handled, it may weaken the

#### *The Root Causes of Corruption in Public Procurement: A Global Perspective DOI: http://dx.doi.org/10.5772/intechopen.105941*

purchase of goods and services process. Highly corrupt nations are more likely to be weak states, and popular views of high levels of corruption in public procurement are likely to worsen corruption in the long run.

Fighting corruption in countries required a collective approach and collaboration with international best practices legal frameworks and guidelines. The United Nations Commission on International Trade Law (UNCITRAL) produced the 'Model Law on Procurement of Goods, Constructions, and Services' in 1994 [8]. It is aimed at national lawmakers and acts as a template law, providing samples of how to organize public procurement legislations and therefore serves as a guide to best practice, supporting strong public procurement policies and lowering transaction costs for implementation. The Model Legislation, as a framework law, offers broad norms and principles of public procurement while leaving precise procedural procedures to the different countries. Countries are given extensive latitude in adopting the Model Law; they are not required to adapt it in its entirety but can choose which elements to apply.

Put simply, public procurement is a complex phenomenon and required governments in various countries to pay attention to the risk factors which can contribute to corruption. Public procurement has traditionally been regarded as a government activity best left to restricted experts, with little respect for its larger governance implications or the critical role it plays in ensuring efficient governments [9]. This was a mistake that policymakers and experts throughout the world are increasingly recognizing, leading to a re-evaluation of public procurement and what it implies for governments and society. It is difficult to overestimate the role of public procurement in bringing down entire administrations, especially in well-established democracies such as Italy [10].

For example, in the South African context, the National Development Plan [NDP] 2030 was announced in 2012, and it lays forth a long-term vision for South Africa in addressing the root causes of corruption in public procurement [7]. The National Development Plan [NDP] aims to eradicate poverty and reduce inequality by 2030. According to the plan, South Africa can achieve these goals by harnessing the energy of its people, growing an inclusive economy, building capabilities, strengthening the state's capacity, and promoting leadership and partnerships across society. The NDP also supports a values-based culture and charts a new course for the country, including the building of a strong anti-corruption system and the formation of an ethical and competent public sector [11].

Globally, the various organization provided guidelines on the root cause analysis and assessing procurement risk. The United Nations Global Compact [12] provides a framework for addressing supply chain corruption. Customers and suppliers are both given useful tools and advice on how to operationalize procurement processes. There is general and particular guidance on corruption prevention and reaction, with a specific one defined in various situations from three primary categories: vendor selection process, contract performance and third parties such as government officials. The risk management and root cause analysis, as methodology is discussed in the next section.

#### **3. Risk Management and root cause analysis**

Risk management is not a new phenomenon. Risk management is a continuous activity that occurs throughout a system's life cycle. It is a systematic technique for detecting and assessing unknowns continuously, creating mitigation alternatives,

choosing, planning and executing suitable risk mitigations, and tracking implementation to guarantee effective risk reduction [13].

Risk management planning; early identification and analysis of hazards; early execution of remedial measures; ongoing monitoring and reassessment; and communication, documentation and coordination are all required for effective risk management. Merna [14] defined risk management as 'any collection of measures performed by people or businesses to modify the risk emanating from their company'. Two things are evident from the preceding definitions: risk management includes the identification, evaluation and prioritizing of risks, and this is important to companies in attaining goals and objectives. The systematic application of management rules, processes and practices to the duties of detecting assessing, evaluating, addressing and monitoring corruption risk is known as corruption risk assessment.

Risks have three components: 1) a future root cause (yet to occur) that, if eliminated or corrected, would prevent a potential consequence from occurring, 2) a probability (or likelihood) of that future root cause occurring at the time of assessment and 3) the consequence (or effect) of that future occurrence [15]. The most fundamental explanation for the occurrence of risk is a future root cause. As a result, risks should be linked to future underlying causes and their consequences. In the context of public procurement, risk management is an essential component of government procurement. For example, a study conducted at a South African metropolitan municipality demonstrated that procurement policy review is the key factor when addressing risk in public procurement, on the other hand, reveals the necessity for a coordinated effort and action to correct anomalies caused by ineffective controls if risks in public procurement are to be reduced and addressed [16]. The findings of the aforesaid study suggested that procurement practitioners and managers lack risk management knowledge and abilities to perform activities assigned to them [17]. As a result, there is an urgent need to empower procurement authorities and managers by providing risk mitigation training opportunities. The overarching process of risk management includes detection, analysis, mitigation planning, mitigation plan implementation and tracking.

Based on the above analysis, it can be argued that risk management should be considered at the onset of the procurement process. All procurement processes should this subjected to scrutinizing whether the risk management methodology has been applied. In the context of the procurement of goods and services, risk management plays a critical component. Procurement of goods and services as a process is confronted with irregularities emanating from weak control measures. The root causes of corruption in procurement emanate from various weaknesses in the system, the application of policies and the inability to operational anti-corruption measures.

#### **3.1 Root cause analysis (RCA)**

One way of enhancing the effectiveness of the public procurement policy outcomes residing in the quality management is root cause analysis (RCA). In the context of dealing with fraud, two things must be done: prevention and/or deterrent. To prevent fraud, the RCA technique is used, which eliminates the root cause, whereas deterrence is more about behavior change, such as the use of strong punishments so that criminals do not commit fraud [18]. RCA is one technique for gaining insights from recognized results. RCA investigates the root causes of an issue [19]. RCA assumptions include that the analysis of the root of the problem to be identified and remedied suggested addressing the main problems. The outcome of the RCA is

#### *The Root Causes of Corruption in Public Procurement: A Global Perspective DOI: http://dx.doi.org/10.5772/intechopen.105941*

aiming to propose an effective solution, which has an impact rather than being purely normative [20]. The advantages of RCA include increased organizational value, the potential for cost savings, learning regarding cause-effect relationships and strategies, providing a logical approach to problem-solving, reducing risk, preventing multiple and repeated failures, improving performance, encouraging system strengthening and streamlining examiner team reporting [21].

Corruption risk assessment techniques are often geared towards assessing systematic hazards in the public sector. There is currently no standardized post-disaster governance or corruption risk assessment approach for specific development projects or development organizations. In the context of corruption in public procurement, root cause analysis is an appropriate technique for various reasons. Firstly, it can be used to identify corrupt behavior before the actual corruption occurred. It can prepare the organization implements measures to address behavioral challenges by minimizing their impact on organizational outcomes. Secondly, root causes analysis also not identified problematic procurement processes prone to corruption but also ensures that mitigation measures are operationalized to address such areas. Put simply, RCA is a tool meant to assist in determining not just what and how an event occurred but also why it occurred. Only by determining why an incident or failure occurred will investigators be able to define effective corrective procedures to prevent such situations in the future. The next section will discuss the institutional root causes of corruption.

#### **3.2 Institutional root causes of corruption**

Institutional root causes are not a new phenomenon globally and, in all continent's procurement environments, limited attention has been devoted to establishing why root causes are the institutional problem. In recent years, theorists have developed a notion of institutional corruption that varies from conventional corruption in both its individual and structural manifestations [22, 23]. Individual corruption, as illustrated by bribery and related unlawful acts [24], is not institutional corruption, nor is structural corruption prevalent in the work of emerging countries [25]. Corruption preys on lawful institutional activities that offer advantages that even an uncorrupted institution needs and for which substitutes must be developed if the institution is to function properly campaign funding, unlike bribes, serves a legitimate purpose. Second, institutional corruption is impersonal: Agents of corruption work in institutional positions and do not have the corrupt intentions that define agents who participate in quid pro quo transactions. Politicians that take campaign money and offer favors to people do so partially in their political interest, but they also promote the competitive and other values of the country [26].

Theorists who have chosen this path draw attention not only to institutional corruption but also to various ways in which institutions might be compromised. The operationalized policy framework and rules should be institutionalized, and procurement practitioners and managers should be aware of the non-compliance and negative effect it might have on the ability of an organization to deliver on its mandate.

Procurement rules should be implemented on an agreed policy directive. On this premise, uniformity among the rules that comprise an institutional field is seen as a predictor of compliance. Compliance is at least achievable if institutional rules are consistent and not mutually exclusive. When the institutional context is marked by uncertainty and ambiguity, the connection begins to deteriorate [27]. Individuals may be unable to demonstrate institutional conformity even though their intent to do so is unquestionable.

From the perspective of global procurement and supply chain networks, [28] analyses internal and external hazards and risk factors. Internal risk factors are those resulting from interactions between enterprises in the supply chain network, such as supply, demand, and trade credit risks. External hazards and risk factors are those resulting from interactions between procurement and supply chain networks and the environment. It can be inferred that internal risk factors must be identified across all procurement and supply chain networks and ensure that early detective systems such as auditing of processes are implemented to mitigate such risk factors. Besides, institutional root causes of corruption factionalism is one of the key root causes that need to be addressed relating to the corruption in public procurement.

#### **3.3 Factionalism**

Political parties play a critical role in the operation of democratic regimes [29]. It is not surprising, however, that their structures and processes, as well as the variables that govern and impact them, have been extensively studied. The resultant stream of study has revealed a wide range of organizational structures that political parties may adopt – and consequently a wide range of methods in which parties execute societal and state-oriented responsibilities. Parties can be hierarchical and bureaucratic in organizational terms, or they can function as flexible umbrella groups for individual candidates. Define factionalism entail according to [30] provides a reasonably impartial explanation, providing two definitions for the word 'faction':


In general, there are two fundamental points of view on factions and political parties. According to modernisation theory, factions are proto-parties or types of the party structure that serve as predecessors to more evolved 'modern' parties [31]. Factions are seen as being typical in the context of the political environment and when potential opportunities are presented for corruption in public procurement. Put simply, factions are about the advantage you can gain over the opposition. In the context of corruption, factionalism presents the opportunity for the ruling political party to get an advantage over the opposition and as a result, use its position to explore the fragile political environment to obtain benefits through corrupt processes.

First, political corruption relates to corrupt acts and activities committed by political leaders to use their discretionary authority to influence national policy in their favor. Consider the following examples from African countries such as Sierra Leone, Angola, Nigeria and Kenia. With this form of corruption, public expenditure is redirected to areas where the profits from corruption are highest, but less attention may be paid to the needs of the bulk of the people [10]. However, it is impossible to discern and quantify political corruption because at least some segments of society benefit from the policies implemented by corrupt political leaders [32].

Rose-Ackerman [33] contends that interest groups offer political contributions to political leaders rather than unlawful bribes to ensure that the political leaders would assist them by enacting favorable policies if elected. She continues to state that when money is used for purposes other than bribery, the illegality of bribery and the

#### *The Root Causes of Corruption in Public Procurement: A Global Perspective DOI: http://dx.doi.org/10.5772/intechopen.105941*

legality of some campaign donations force politicians to accept alternative forms of payment rather than cash transfers. Furthermore, politicians may attempt to protect themselves by arranging for bribes to be delivered to aides, wives, or business connections; and if they do take bribes. The causes of corruption are rooted in the particular political and economic conditions of each country and institutional level within the procurement processes of an organization [34].

The consequences and form of corruption by political leaders, for example, do not mirror copies of bureaucratic corruption. Corrupt politicians use their positions of power to enact economic agendas. Politicians, as elected officials, are expected to make resource allocation decisions purely in the interests of their principal - the public. Instead, corrupt political leaders can modify the national policy to promote their interests staying in power and increasing their riches at the expense of the public [32].

For example, when an official receives a bribe in exchange for a favor, the personal gain is not a valid component of the official's compensation, and granting the favor is not a lawful part of the official's job description. In a well-functioning institution, the transaction serves no useful purpose. Institutional gain, on the other hand, encompasses assets that are primarily useful in an institutional capacity and are required for, or crucial by-products of, fulfilling the position. Institutional gain may be just as self-serving as personal gain, but it fulfills a legitimate institutional role. Even in a fully operating institution, it is required and beneficial under certain situations. The system in a democracy is based on politicians pursuing political gain; we rely on their wanting to get elected or re-elected [35]. It can be inferred that corruption increased because of the inability of political leaders to adequately implement measures to curb corruption. In many cases, politicians sometimes handled corrupt cases causally and clumsily and as a result, no prosecution is pursued against the corrupt officials. More importantly, the implementation of red flags relating to corruption is only the first step of anti-corruption initiatives but also the adequate protection when corrupt practices are disclosed by whistleblowers, which will be discussed in the next section.

#### **3.4 Inadequate protection of whistleblowers**

Whistleblowing concerning professional misbehavior is a critical component to curb corruption. In addition to inadequate training, knowledge and resources, important grounds for whistleblowing include public procurement outcomes, anticipating and reporting of catastrophic occurrences, suspicion of fraud, a bullying culture towards patients or colleagues, and research misconduct [36]. Whistleblowers have historically encountered daunting workplaces in which their concerns are ignored, maintaining a fear culture [8]. As a result, many regulatory agencies now allow for anonymous reporting and shield informants from victimization, harassment, and dismissal.

Global and regional whistleblower protection demonstrate the rising importance that the international community places on whistleblowing as an anti-corruption instrument. The Inter-American Convention Against Corruption (IACAC), the first inter-governmental agreement to address whistleblower protection, emphasizes the importance of whistleblower protection as a weapon for anti-corruption. Member States are urged to adopt and improve measures to safeguard those who report corrupt behavior. The United Nations Convention Against Corruption (UNCAC) requires state parties to adopt domestic steps to include protection for whistleblowers, witnesses, and their families in their legislation and other provisions [37].

#### *Corruption – New Insights*

Countries are also asked to put in place procedures that ease reporting of corruption to competent agencies to comply with the terms of the UNCAC. Article 32 also specifies that State Parties must establish appropriate mechanisms to safeguard witnesses who reveal wrongdoing and their family from real or threatened harassment, reprisal or intimidation. According to the Council of Europe's Civil and Criminal Law Conventions on Corruption, 'each Party shall provide in its internal law for appropriate protection against any unjustified sanction for employees who have reasonable grounds to suspect corruption and who report in good faith their suspicion to responsible persons or authorities' [38]. The first step of the whistleblowing process includes reporting illicit activity. The reporting can be done open and anonymous, according to the specific circumstance and the nature of the corrupt case in which it occurs. While anonymous reporting takes the form of disclosures of confidential information, the safety of the whistleblower must be protected. Depending on the institutional policy or arrangements reports may require a level of authorization. The reporter of the corrupt practices can be a member of the organization where the reported facts occur [39]. If the whistleblower is a member of the organization it can be seen that easy access to some information relevant to the reported case. In practice, most of the rage whistleblower report on wrongdoing occur within the organization.

In the context of Africa, the African Union Convention on Preventing and Combating Corruption (AUCPC) acknowledges the negative impacts of corruption on the stability of African countries and peoples and also recognizes whistleblowing's potential as an anti-corruption instrument and urges states to enact legislation to penalize individuals who make false and malicious complaints against innocent people in corruption and related offenses [40]. It can be inferred that the root causes of corruption in the context of whistleblowing are residing in the fact that protection of the whistleblower can be guaranteed and as a result, they are reliant to report cases of corruption. In the absence of reporting, the corruption can increase in an organization and later on becomes the accepted norm and the corrective action relating to the corrupt act is not addressed. It can be concluded that the impact and effectiveness of whistleblower policies and protection laws in the curbing of corruption is a novel and complex undertaking because the relationship between the whistleblowing and the motion to promote good governance, whether direct or indirect, is a still challenge and more research needs to be conducted to address the whistleblower protection measures from an organizational perspective.

#### **3.5 Political interference in procurement processes**

Political meddling has a negative impact on contracts and tenders [41]. In many countries, public procurement plays a significant role in the provision of goods and services to its citizens. Over the last few decades, emerging countries have paid close attention to public procurement. Procurement budgets in developing nations account for almost 20% of total government spending globally [42]. Many countries have begun procurement system changes to simplify and harmonize the legislative and institutional environment. Political influence in the procurement of goods and services plays a role and non-compliance to the legislative framework can lead to corrupt practices.

The ruling party of many countries is ultimately responsible for the development and implementation of policies and set the agenda for political direction [43]. Demonstrate that by rigorously implementing the legislative framework and procurement policies in all government purchases, any tampering in awarding government

#### *The Root Causes of Corruption in Public Procurement: A Global Perspective DOI: http://dx.doi.org/10.5772/intechopen.105941*

projects can be reduced. The usage of technology during the procurement processes such as e-Procurement acts as a 'barrier' to a greater range of intervention by entrenched interests. As a result, the awarding of government contracts adheres to core principles of government procurement. The next section will discuss the noncompliance to procurement integrity pacts.

#### **3.6 Non-compliance to procurement integrity pacts**

Transparency International promotes the Integrity Pact (IP) as an effective instrument for combating corruption in public contracts. It is a pact between the government and bidders in public procurement and contracting that no party will pay, give, demand or accept bribes. They will also not work with rivals to secure or carry out the contract. It compels bidders to declare all contract-related costs and to commit to being sanctioned if there are any breaches. Loss of the contract, forfeiture of the company's performance bond, damage responsibility, blacklisting and criminal or disciplinary action against government workers are all possible sanctions.

As a result, compliance with a previously defined procurement policy is judged vital and critical for public organizational procurement management success. Nonetheless, it is important to mention that the effectiveness of procurement management is measured not only in terms of compliance or conformity with government regulations and processes but also in terms of real outcomes or impacts on the ground. As a basic role in an economy, public procurement is vulnerable to market changes and trends, as well as the interests of the government in many countries. Due to increased government spending and assistance from development partners, the public procurement function faces a slew of issues [44]. To guarantee cost-effective use of government resources, it is critical to characterize the issues faced by public procurement partners.

## **4. Recommendations**

#### **4.1 Adoption of the international legal framework**

Various international organizations provide guidelines and legal instruments for the countries to adopt in their fight against corruption. The Organization for Economic Development and Cooperation's Convention on Combating Bribery of Foreign Officials in International Commercial Transactions, [45] adopted in 1997, was one of the most important international documents classifying anti-corruption tools. Following that, the OECD supplanted the UN as the major international anti-corruption body, issuing several recommendations, guidelines and anti-corruption tools.

The World Bank, an international financial body, has also been focused on eliminating corruption, which has resulted in anti-corruption initiatives being integrated into the bank's lending conditions. As a result, the World Bank became aware in the early 1990s that a considerable amount of its loans had been diverted as a result of fraudulent activities [46]. Following that, specific incidents of corruption, such as the corrupt practices in Kenya utilizing World Bank money, prompted a shift in the organization's focus [47].

As the most recent binding instrument enacted at the international level, and as the sole universal convention on corruption, UNCAC is the finest instance to analyze the actuality and breadth of the international regulatory framework's recognition of

corporate standards and their potential function. However, international guidelines are paying more attention to the international regulatory framework, on which countries want to construct and enhance the legal environment of anticorruption initiatives. This focus stems from a preoccupation with the uniformity of the relevant framework. At the same time, this acts as an extremely effective instrument for the dissemination and circulation of shared standards. International guidelines referencing the international legal framework may result in their incorporation and absorption into governments' policies, anti-corruption guidelines and plans and standards, resulting in the attempt to strengthen the enforcement capabilities of anti-corruption initiatives.

It should be highlighted that the idea of corruption in this international legal act encompasses not only the receiving of payment or gifts but also the official action of an official in connection with the receipt of such gifts. Starting with this definition of corruption, we may broaden the list of corruption offenses to include abuse of office and misuse of official power. It is also worth noting that, according to this definition, corruption can encompass legal official activity by an official if it is motivated by gifts received or promised. Despite the plethora of international anti-corruption guidelines, corruption cases are on the increase in many countries. There are various reasons why corruption in public procurement is on the increase in countries.

It can be argued that the root causes are based on the adoption of the international legal instruments but on the ability of each country to implement and operate anticorruption measures to curb corruption in public procurement. It is clear that public procurement is vulnerable to corrupt practices and without a strong institutional anti-corruption culture the battle against corruption cannot be won. It also requires political will to ensure that procurement processes are implemented according to the set of rules and policies.

#### **4.2 Revamp the public procurement system and processes**

Globally, the corruption in the procurement of goods and services posting major risks to the development of economic prospects. Despite the availability of legal frameworks provided by international organizations, countries still lack the political will and accountability to implement measures to curb corruption in public procurement. These institutions, such as the World Bank, the African Development Bank, and the European Union, have supported 'country procurement assessment reports' in Sub-Saharan African countries, to expose weaknesses in in-country processes and encourage procurement reforms where necessary [48].

Revamping also includes exploring the use of online technology for the procurement of goods and services to reduce face-to-face interactions, increase openness in the procurement processes and concurrently build trust, limit the risk factors of corruption and fraud [49] E-procurement involves fewer human interactions and risk factors are mitigated by ensuring that possible bribes cannot be concluded between the supplier and buyer. It also increases competition, which helps to limit the number of personal judgments made when awarding contracts. As a result, e-Procurement is an important instrument for reducing the risk of fraud and corruption in private and government agencies. This article attempts to give insights on the mitigation risk factors in public procurement and how its implementation might be utilized as a 'tool' to reduce global public procurement fraud by employing a political economy approach. The political economy approach helps to mitigate procurement fraud in the private and public sector and provides solutions to deal with unacceptable behavior

of procurement and suppliers individuals. More importantly, the institutionalization of the rule of law is crucial to addressing corruption and will be discussed in the next section.

#### **4.3 The institutionalization of the rule of law**

Public procurement is a key aspect of the law. Insofar as public services, supply contracts, and works contracts are concerned, it is aimed to maintain internal market freedoms and an opening up to the competition in the member states, which must be undistorted and as broad as practicable [50]. Under the institutional dichotomy, the absence of rule of law has been highlighted as a determinant of corruption. According to the Executive Director of the United Nations Office on Drugs and Crime (UNODC), 'where corruption exists, the rule of law cannot flourish' [38]. This means that the rule of law and corruption are negatively connected [51, 52]. Corruption and bribery undermine fair tender procedures, with serious consequences: funds meant for life-enhancing initiatives [such as schools and hospitals] may be diverted into the hands of corrupt persons. Corruption weakens the rule of law.

Procurement has more to highlight that an efficient procurement system includes monitoring and enforcement tools to guarantee that system rules are followed by procuring public entities and participating parties. Important procurement system fundamentals should include challenge mechanisms, in which suppliers and contractors have the right to oppose decisions and acts of procuring public organizations that violate procurement principles and norms. Ensuring that procurement choices be reviewed or challenged deters future illicit acts [53].

Based on the above assessment, public procurement procedures fall under the purview of administrative law due to their nature. However, due to the unique characteristics of public procurement, not all parts and legal institutions of the 'conventional' administrative process apply to these operations, and instead, specific procurement laws are applied. To begin with, contracting authorities must follow OECD standards, Transparency International rules and principles derived from the United Nations and the World Bank when awarding public contracts.

#### **4.4 Strengthening capacity building**

Strengthening the capabilities of public procurement officials to execute procurement functions within the boundaries of the procurement legislative framework including policies and guidelines is one the most important factors to curb corruption. In building and strengthening capacity in public procurement, the World Bank proposes various strategies to mitigate risk and enhance the implementation of anti-corruption measures [54]. These proposals from the World Bank's assistance are to guide governments to mostly concentrate on institutional reform and capacity building initiatives in procurement. These reforms include assistance in drafting procurement regulations, determining the institutional setup and functions of central procurement units or agencies establishing cross-cutting procurement systems including procedures, guidelines and standard bidding documents, with a focus on e-procurement systems, promoting procurement process transparency, for example, through web platforms and establishing procurement training centres and technical assistance to procurement units. Implementing institutional reforms is not easy and requires management commitment. Various country-wide challenges such as infrastructure, the level of education and aptitude to operationalize anti-corruption is one

of the many challenges. Based on the aforesaid, it can be deduced that well-resourced countries are in a better position to implement web platforms such as the technological approach to curb corruption than less resourced.

Besides building capabilities in the procurement environment, the salaries of public officials can have an essential role in determining the reasons for corruption. According to [55] model, greater earnings correlate with less corruption due to the costs of misconduct. If a bureaucrat accepts bribes and is caught, he will lose his job and be forced to work in the private sector. The higher the earnings in the public sector in comparison to the private sector, the greater the expected loss from job loss and the lesser the incentives to participate in a corrupt activity—provided there is a sufficiently high degree of supervision. For example, the Hong Kong and Singapore anti-corruption models demonstrated that anti-corruption can be implemented based on the situation and context of a particular country. It can be inferred that the payment of incentives to government officials is one of the effective methods to curb corruption in Singapore and Hong Kong.

#### **4.5 Implementation and prioritization of lifestyle audits**

The conducting of lifestyle audits is one of the anti-corruption measures countries need to consider to curb corruption. Lifestyle audits are based on the assumption that one's financial capability has a significant impact on one's quality of life and level of affluence. Any evidence of inconsistency between an individual's income and lifestyle should prompt an inquiry and the recovery of corrupt gains.

Globally, the Inter-American Convention against Corruption (IACAC) advocates an inter-governmental agreement to strengthen the whistleblower capabilities as an anti-corruption tool. It is required from members state signing the agreement (IACC) to implement measures for the protection of whistleblowers of the person disclosing corrupt activities. Additionally, the United Nations Convention Against Corruption (UNCAC) also protected whistleblower protection.

In the light of the above, the G20 countries pledged in 2010 that they would have enough safeguards in place by 2012 to protect whistleblowers and give them secure, dependable channels for reporting fraud, corruption, and other misconduct. Despite great progress in several areas, they have fallen short of reaching this objective overall. Many G20 countries' whistleblower protection laws fall well short of international norms and best practices. More importantly, whistleblower protection should remain a top focus in G20 leaders' promises to promote integrity and anti-corruption in all countries. The G20 countries consist of a group of twenty of the world's top nations created in 1999 and were envisioned as a bloc that would bring together the world's most significant industrialized and developing economies to debate worldwide economic and financial stability [56].

In a sought to explain the features of the legal and institutional frameworks in highlighting the related causes of systemic challenges, responses relating to the lack of political will; improper human behavior and resistance to change and the presence of institutional corruption is evident. To address corrupt practices in countries there should be intent to operationalize and implement anti-corruption measures country-wide and on an institutional level. Building strong anti-corruption organizations required also not only an effective and functional governmental organization but also training on human behavior and the impact of corruption on the economical precepts and opportunities in a country. The evidence of poor -institutional design and structures including insufficient control measures and reluctance to change is the breeding ground for corrupt practices in public procurement.

#### *The Root Causes of Corruption in Public Procurement: A Global Perspective DOI: http://dx.doi.org/10.5772/intechopen.105941*

Stemming from the above, it can be concluded that a multi-approach is required to implement anti-corruption measures. Thus, one of these measures is the conducting of lifestyle audits earmarking all officials involved in the procurement of goods and services. It, therefore, requires more than collaboration with the suppliers but also continuous assessment of the risk factors, which could negatively influence the ability of the organization to minimize corrupt practices.
