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Make Addis Ababa stand for openness in development finance

by Gavin Hayman and Charles Kenny
Friday, 10 July 2015 09:16 GMT

In a 2012 file photo, a street vendor sells seeds in front of an exchange bureau in Cairo. REUTERS/Asmaa Waguih

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* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

Publicly accessible data on government contracts for infrastructure and services could be a game-changer for development

Next week in Addis Ababa, finance and development officials from all over the world will be discussing how to pay for the Sustainable Development Goals. The infrastructure goals alone carry a price tag of over $1 trillion a year.

The world needs to ensure that money is well spent and results in real benefits for the world’s poorest people. We can do a much better job at that.

Public contracting and procurement is vital. It’s where all these extra billions will actually be converted into the roads, schools and hospitals that citizens care about. Providing publicly accessible, timely and comparable data on the government contracts that build infrastructure and purchase vital goods and services could be a game-changer for development.

All too often, public contracting is plagued by mismanagement, malfeasance, and secrecy. That can have deadly consequences: “tofu” schools, constructed to substandard specifications in an earthquake zone, that fall down on their students; billions of dollars misappropriated through secret deals and asset flips in the oil and mining sectors; fake medicine and medical equipment that kills patients; and huge Olympic construction boondoggles.

Six out of 10 foreign bribery cases prosecuted to date under the Organisation for Economic Co-operation and Development Anti-Bribery Convention have involved bribes to obtain public contracts.

Making government contracts truly public through disclosure, better data, and better civic and business participation in contracting helps everyone. Governments will get better value for money. Businesses will find it easier to bid and see fairer competition. And citizens will get what they pay for in terms of infrastructure and services.

Examples from countries as diverse as Slovakia, the Ukraine and Afghanistan show what can be achieved with a little more openness.

In Slovakia, government contracts aren’t official until they are published. Transparency reforms have seen a significant increase in the number of firms bidding for government contracts, but also uncovered cases of waste and brought down spending on cognac, luxury cars and expensive seafood. Teachers were able to review contracts by the Ministry of Education to uncover florists’ bills for thousands of euros, showing how lower barriers to accessing information can stimulate citizen oversight.

In the Ukraine, businesses and civic technologists have come together to help the government with procurement of humanitarian supplies after the Maidan protests in Kiev in the winter of 2013-14, using open contracting data as the core of a new transparent public tendering and auctioning system. They are saving 10 to 20 percent on their tenders as a result. The platform can now be scaled up to cover all of Ukraine’s government spending.

In Afghanistan and the Philippines, civil society members have monitored hundreds of projects to deliver roads, schools and clinics. In Afghanistan, the teams were able to resolve 80 percent of the problems uncovered. In the Philippines, the price of delivering textbooks to children has halved.

The key to further progress is to make all public contracting information open. Open means not only that information is available, but that it is readily shareable and usable and in data formats that enable large-scale analysis.

That is the goal of an alliance of government reformers, businesses, civil society, technologists and intergovernmental organisations called the Open Contracting Partnership. It is already working in more than 10 countries to foster contracting transparency.

To help the Addis Ababa Financing for Development conference deliver on the promise of the Sustainable Development Goals, many more governments should commit to publishing their contracts - including public-private partnerships - to fostering open, fair contracting arrangements and to opening up their public contracting information.

This is critical to ensure that the trillions being spent on development deliver results to the people who need them most – and a great way to craft better deals, build trust with citizens, and promote a better, fairer business environment

Gavin Hayman is the executive director of the Open Contracting Partnership. Charles Kenny is a senior fellow at the Center for Global Development.