1 PREVENTING FRAUD AND CORRUPTION IN PUBLIC - PowerPoint Presentation

1   PREVENTING FRAUD AND CORRUPTION IN PUBLIC
1   PREVENTING FRAUD AND CORRUPTION IN PUBLIC

1 PREVENTING FRAUD AND CORRUPTION IN PUBLIC - Description


PROCUREMENT The crucial role of upstream phase grants to local governments and clientelism Sorin Ioni ţă Sorinionitaexpertforumro EFOR June 2014 Sources of corrupt practices ID: 788870 Download

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pdl clientelism udmr discretionary clientelism pdl discretionary udmr transfers 2011 state boc psd riceanu igft water practices igfts sources

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Slide1

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PREVENTING FRAUD AND CORRUPTION IN PUBLIC PROCUREMENTThe crucial role of “upstream phase”: grants to local governments and clientelismSorin IoniţăSorin.ionita@expertforum.roEFOR, June 2014

Slide2

Sources of corrupt practices

Petty corruption (administrative)  the most dangerous in NMSInstead, it is Grand Corruption / State capture which is the problem Main sources / policy domains, interlinked:The public procurement proper (PP)Inter-governmental financial transfers (IGFT, center  LGs), esp investmentsState owned enterprises (SOEs)2

Slide3

Sources of corrupt practices

3State (central)State (intermed, regional)State (local)Private actors (companies)State (SOEs)2

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Slide4

PP: the broader view

The view of PP should be broader, for purposes of monitoring:IGFTs for investments (step 1) should be transparent, predictable, competitiveNational IGFT were expected to adopt best practices from EU fundsIf IGFT is opaque, discretionary and possibly corrupt, it is likely that step 2 (PP) will be likewise, too4

Slide5

Step 1 (IGFT) – analysis

We measured discretionary allocations central government  County Councils  Local Governments: mostly investment instruments, but not only6 types of grants = substantial sums; in the peak year 2008 they were 80% of the total own revenues in LGs (tiers I+II); and 70% of total sub-national capital spendingAll sums from national budget; no EU grant5

Slide6

Financial transfers

Emergency fund of the government (2004-2011): various destinationsFunds for county and rural roads (2005-2011): mainly spent by countiesEnvironmental fund (2008-2011): water-sewage systems, parksFunds for schools (2007-2010, MinEd): investments, maintenance, but also current arrears6

Slide7

Financial transfers

HG 577 / 1997 (2004-2011, MDRT): rural roads, water systems in ruralOG 7 / 2006 (2007-2011, SGG): water-sewage, bridges (small), rural sport facilitiesLack of sectorial coordination (water, roads)  ministerial rivalries7

Slide8

Discretionary IGFTs: volume

8PSD, NăstasePNL+PDL+UDMR, Tăriceanu

PNL+PSD+UDMR, T

ă

riceanu

PDL+PSD Boc

PDL+UDMR Boc

Slide9

Discretionary IGFTs: clientelism

9PSD, NăstasePNL+PDL+UDMR, Tăriceanu

PNL+PSD+UDMR, T

ă

riceanu

PDL+PSD Boc

PDL+UDMR Boc

Slide10

The clientelism index

10Discretionary transfers increased after formulas were introduced (and enforced) for shared taxes, after 2005 i.e. clientelism shifted from one mechanism to anotherThe peak of clientelism = during the economic boom (2007-08); public budgets increasing fast  bad governance (!)Discretionary transfers  political migration of mayors, with a twist: “independent” mayors were most privileged

Slide11

The clientelism index

11Additional indicators of clientelism in could be built (contractors profit rates; energy)Similar indicators of clientelism in other countries needed  early warning instrumentRo utterly failed to transfer best practices from EU funds to national investm fundsThe situation got worse in 2012-2013: less transparency, unpublished allocations

Slide12

Discretionary IGFTs: clientelism

12Interactive map of allocations, the 6 instruments, 2004-2011http://expertforum.ro

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