Corruption in Procurement

UNIVERSITY OF DAR ES SALAAM job SCHOOL AN ASSESSMENT OF CORRUPTION IN THE PROCUREMENT PROFESSION IN regimen CASE IN TANZANIA. BY BERNARD, HELLEN REG. nary(prenominal) 2009-06-00929 interrogation PROPOSAL SUBMITTED FOR APPROVAL TO comport OUT RESEARCH FOR THE DEGREE OF put up the hang OR BUSINESS ADMINISTRATION. T adapted of circumscribe 1. 0 INTRODUCTION 1. 1 background3 1. 2 STATEMENT OF THE PROBLEM4 2. o investigate aim6 2. 1 RESEARCH OBJECTIVES6 3. 0 RESEARCH QUESTIONS6 3. 1 RESEARCH HYPOTHESIS. 7 4. 0 literary works REVIEW 4. 1 abstr influence LITERATURE8 4. THEORETICAL manakin. 10 4. 3 EMPIRICAL LITERATURE.. 12 5. 0 METHODOLOGY. 14 REFERENCES. 17 1. 0. INTRODUCTION 1. 1 punctuate The Tanzania giving medication has long realized the grandeur of reality procurance to the economic cultivation of Tanzania and hence to the fulfillment of key objectives deep down the national Poverty Reduction Strategy. To this effect, Tanzania was atomic number 53 of the firs t countries in Sub-Saharan Africa to decree a truth modelight-emitting diode on the UNCITRAL model law.Since 1996, when the first landed e raise procurance assessment report (CPAR) was carried bug egress, the organisation has been roamning(a) c overlookly with the cosmea Bank and early(a) development wear outners to enhance the economy and strength of its procural system and to render it to a greater extent transp arnt and accountable. The Government has long adjudge that there is rampant turpitude in Tanzania and has been fighting hard to reduce it. It is estimated that at the national level rough 20 percent of the policy- do science expenditure on procural is mixed-up by means of rotting, in the main by means of and through kick-backs and bogus investments that rescue to be written off.Considering that popular procurement accounts for about 70 percent of the st allion organisation expenditure budget, this trans afterward-hourss to a overtaking of TS hs ccc billion (USD 300 million) per year, enough to pay the combined annual recurrent budgets of the ministries of health and education. Clearly such(prenominal)(prenominal) a loss is economic alone told(prenominal)y unsustainable. Major losses authorise in construction and supply contracts, which argon the study avenues for bungleion, particularly at the local organization level. The direct for enhancing the transpargonncy of the procurement system goat non therefore be overemphasized.The Government of Tanzania is well(p)y aw ar that its familiar procurement is still weak and call for to be strengthened substantially to enable it to verify that the procurement laws and institutions m another(prenominal) effective in additionls in the efficient and transp arnt concern of familiar funds. strategic management in the humanity welkin begins by looking up toward governing -the current expectations and aspirations of citizens and their representatives and the older semi semipolitical agreements officially enshrined in the economy that defines public managers mandates for action. putridness had been inculcated in the political stopping point of just about underdeveloped countries while, it still elicits the disapproval and opposition of the public, it has n unrivaledtheless been accepted as a fact in the political life. One of the primary argonas of putrescence is in the procurement cognitive subroutine. Grounded on the idea that, the scraping and butter of politicians exists in this perspective, the procurement butt has been the locus and target of some politicians aiming to get a slice of the cake. In leash world countries, this part of the cake proves to be the life of wad.The foreign aid habituated by international organizations like the population Bank and the International M nonpareiltary breed and the establishment r regular(a)ue from taxes is easily lost at one magazine the budget is distributed to departments and t he purchase of equipments and materials has begun. . sooner on we head teachered the assumption or erudition that putrefaction, especially petty demoralizeion is a function of low pay. In our polish of theories of motivation we noted that there is consensus among theorists on motivation on pay organism a necessary, but not fit condition for an employee to perform at a minimal level in an organization.Where an employee has a perception that the level of compensation habituated by the employer finishnot and depart not go through basic living/existence requisites, and the employee is not in a position to locomote from the organization, he/she get out adopt unnatural work way, which exit include a number of income maintenance strategies, including depravation to hide the income shortfall. 1. 2 solid groundment of the problem The procurement process has been the locus of governing body depravation- unless this discount be enshrouded the citizens of Tanzania entru sting stay on to suffer.It is necessary that strategies and measures be introduced in the government procurement profession to reduce the rotion in this process and in effect, despoilion in the government. procural rottenness is profoundly rooted in the political cultivation and traces its roots on the nature of governments. As long as the nature of government and political relation remains to be relatively immature, dappleion in the procurement process get out remain. Thus, the need for strategies to hamper this circumstance arises.A focus on report reports, editorials and letters from readers in each of the last(a) ten years would make one conclude that this country has been eaten away by the degeneracy scourge. Contrast the foregoing daub with what obtained between 1961, as we became independent and the slow 1970s. The decade following Tanzanias independency (1960-1970) did not manifest intense rot. Where it took postal serve it tended to be restricted to low-l evel officials who demanded and get negligible sums of funds.As the country spread out the public sector and public giving medication institutions progressively decayed, entailing the rise of bureaucratic malfunctioning, opportunities for rent-seeking way and asking and offering vitiates started creeping in. In the same period, the greet of living roseate dramatically while public attend pay remained static or declined. man officials became driven by a refinement of survival and they progressively adopted pervert behavior patterns dealed earlier in the paper, including the drop of corruption as an income maintenance strategy.To address and control the trend of increased corruption, the Nyerere Government enacted the lead code as part of the Arusha Declaration which had been adopted in 1967 and consecrated Tanzania to the pursuit of Ujamaa and Self Reliance as its ideology. While moral suasion through a socialist code of acquire was making its contribution to the figh t a net profitst corrupt tendencies, the country came to experience a study economic crisis following the oil crisis and the after effectuate of the war with Idd Amin in the late 1970s and early 1980s, with double shape inflation, major(ip) fiscal deficits and negative economic growth.That situation saw the present lose its ability to pay public servants a living wage. Official salaries, even at managerial and executive levels, fell infra subsistence needs, creating incentives to look for side incomes. As the state controlled economy declined, an informal one arose to absent its place. Smuggling became rampant. In the end, the harsh realities of scar urban center and poverty overwhelmed the dedication to socialist comparability and corruption became embedded in Tanzania society. 2. 0 RESEARCH AIM This study aims to direct measures and strategies that could resolve the issue of government corruption in the procurement process. . 1 re pursuit objectives This research paper ai ms to 1. Identify the antithetical procurement corruptions in governments of triad World countries 2. Determine the stages of the procurement process and comprehend where corruption happens 3. Evaluate the nature of Third World Government and politics and the corruption in procurement 4. Propose measures that can resolve the issue of corruption in the procurement profession 3. 0 RESEARCH QUESTIONS This study seeks to answer the following questions 1. What atomic number 18 the indicators of procurement corruption and how extensive is it mong governments (Developed, maturation and Third World) 2. What ar the different corrupt practices in the process of procurement? 3. Outlining the procurement process, what stage(s) does corruption happen? 4. In congeneric to the nature of Third World Governments, what is their semblance and to what degree that these two variables (corruption in procurements and government) find each other? 5. What be the measures and strategies that gover nments have employed to address this issue? 3. 1 Research hypothesis 1.The nature of government and politics in a country is significantly appertaind to its corruption practices 2. The more than(prenominal) accountable the government, the lesser the tendency of corruption in the procurement process 3. Further, procurement corruption is directly related to the miss of transp atomic number 18ncy in government purchases. 4. 0 LITERATURE REVIEW 4. 1 conceptual literature CORRUPTION putrescence is a very widespread phenomenon with most governments having a least just about. While corruption normally meets with disapproval, it may have some redeem features (Tullock, 1996).It may make possible littler or no salary payments to officials who, if c befully supervised, will still carry out their functions on a fee-for-service basis (Tullock, 1996). transparency International (TI) has chosen a ready and foc employ definition of the term depravity is ope demythologisedly defined as the misemploy of entrusted power for secluded gain. TI come along differentiates between according to rule corruption and against the rule corruption. Facilitation payments, where a bribe is gainful to receive preferential treatment for something that the bribe receiver is needful to do by law, constitute the former.The latter, on the other hand, is a bribe paid to obtain operate the bribe receiver is prohibited from providing. The cost of corruption The cost of corruption is four-fold political, economic, social, and environmental. On the political front, corruption constitutes a major obstacle to democracy and the rule of law. In a democratic system, offices and institutions lose their genuineness when they are misused for secret advantage. though this is harmful in the established democracies, it is even more so in freshly emerging ones.Accountable political leadership cannot develop in a corrupt climate. Economically, corruption leads to the depletion of national wea lth. It is often trusty for the funneling of scarce public resources to uneconomic high-profile projects, such as dams, power plants, pipelines and refineries, at the write down of less spectacular but more necessary infrastructure projects such as schools, hospitals and roads, or the supply of power and system of water to rural areas. Furthermore, it hinders the development of fair grocery structures and distorts competition, thereby deterring investment.The effect of corruption on the social fabric of society is the most damaging of all. It undermines peoples trust in the political system, in its institutions and its leadership. Frustration and general unfeelingness among a disillusioned public proceeds in a weak polite society. That in pass on clears the way for despots as well as democratically elected yet unscrupulous leaders to turn national assets into private wealth. Demanding and paying bribes become the norm. Those unwilling to comply often emigrate, exit the c ountry drained of its most able and most honest citizens.Environmental degradation is yet another consequence of corrupt systems. The lack of, or non-enforcement of, environmental regulations and legislation has historically allowed the North to export its polluting manufacture to the South. At the same time, careless exploitation of natural resources, from timber and minerals to elephants, by some(prenominal) domestic and international agents has led to pillaged natural environments. Environmentally devastating projects are given preference in funding, because they are easy targets for siphoning off public money into private pockets.PROCUREMENT procural is the full process involved in acquiring required goods, services or works. Procurement involves identifying the requirement of the purchasing control, building a list of minimum requirements, and then hit both affaireed parties who meet the minimum requirements, unremarkably offering the highest score base on the most e conomically plus bid, commonly known as opera hat value. Part of the Procurement process is besides to manage the contract once awarded, to ensure that the successful suppliers, or suppliers, are providing a quality service.Collaborative contracts are becoming more commonplace where triplefold public bodies will combine their requirements and run a single Procurement process to meet their merged requirements. Due to the higher(prenominal) volume of business promised by collaborative contracts, suppliers will usually offer large discounts. Collaborative contracts are usually led by one public body, acting on behalf of the others. In addition to this, some Procurement Centers of Expertise set up and manage contracts on behalf of public bodies, allowing all public bodies to use these collaborative contracts. few examples of these Centers of Expertise are OGC, Buying Solutions and Procurement Scotland. The stage of the Procurement cycle when suppliers are invited to submit bids i s known as the Tendering process. Usually, in addition to submitting their monetary bid, suppliers are required to respond to a questionnaire which the public body has put together with the intention of identifying and eliminating suppliers who are unable to meet their basic requirements, thereby preventing their tender from being successful disregardless of whether they have the most economically profitable bid. . 2 Theoretical framework The doctrinal study of political corruption encompasses matters of definition, typology, cause, and consequence, cogitate by a common suppositional framework. A substantial body of literature explores these issues, but m either problems exist. The countless definitions inadequately set out the fundamental prescriptive and behavioral dimensions of corruption and fail to be the phenomenon into a broader theoretical framework or to deal accurately with the question of private involutions.Typologies of corruption, though equally rife, also expe ct to lack clear theoretical relevance. breathing explanations of corruption can be attacked for project confusing and contradictory hypotheses, for being fragmentary, and for failing to differentiate various fibers of corrupt behavior those centering on the functions of corruption also seem incomplete. Some, for instance, underscore the positive effects of corruption in integrating judgement elite but fail to question whether corruption influences feelings of legitimacy toward government or inspires destabilizing protests and mobilizations.As a form of abnormal political behavior, corruption is political contract contrary to political norms. This definition underscores twain its normative and behavioral components. The normative aspect of corruption centers on the evaluative standards or rules that determine political propriety the criteria used to judge the legitimacy or bastardy (i. e. , the corruptness) of a political act the behavioral aspect corresponds to observable ac tions (Morris, 1991). The norm provides the standard by which all acts of government are to be interpreted and judged.Accordingly, any private usurpation of that pertaining to the public domain, which negates this principle, invites condemnation. An grave issue that warrants attention concerns the share of face-to-face gain or interest. Including personal gain or what is tantamount to private interest in a definition of corruption presents two major problems. First, it is generally held that all acts are a function of personal gain in formal theory, this is referred to as rationality. Consequently, all acts by government officials, whether corrupt or otherwise, are thought to be motivated by a rational promotion of private interest.In other linguistic process, a non corrupt act is promoted by personal interest just as is a corrupt act. Since personal interest is an assumption of human behavior and a constant, it need not be include in a definition Strategic management in the pu blic sector begins by looking up toward politics -the current expectations and aspirations of citizens and their representatives and the older political agreements formally enshrined in the legislation that defines public managers mandates for action. authorities, and the laws that politics produce, deserve this pride of place for three key reasons. First, it is this realm that managers must search to discover what drives are deemed publicly blue-chip and can, therefore, be practically and normatively sustained as the focus of their managerial efforts. It is in and through politics that they can discover and inspection and repair shapes their mandates for action.Second, political institutions grant public managers the resources they need to accomplish their operational purposesincluding money and authority over their own organizations and over those beyond their organizations who can contribute to the managers purposes. Third, it is to politics and law that public managers are bo th theoretically and practically accountable their performance is class-conscious and their reputations made within this realm.Procurement spying often entails large monetary sums and involves wide known or powerful people inside and outside government. Thus, this kind of corruption can be especially damaging to a country in foothold of distorted incentives, undermined public trust, and inequitable dispersal of national budgets. This is particularly prevalent in Third World countries where the political socialization of people seems to accept corruption as a part of the political culture.Among the hotshot qualitys of procurement corruption includes collusion in command (leading to higher costs/prices for the city, payments for which may or may not be shared with corrupt officials) kickbacks by firms to fix procurement competition and bribes to officials who regulate the fetching contractors behavior (which may permit approximate bids with subsequent cost overruns and unneces sary changes in contract specifications) (Klitgaard, MacLean, and Parris, 2000). 4. 3 Empirical literature Corruption is about economics, gaining power, maintaining power and regrettably to some, survival (Green, 2000).Generally, its been my experience that corruption usually involves bribery, kickbacks, gratuities and gifts to government employees from individuals doing business or attempting to do business with the government. A large division of corruption taking place within governments and businesses worldwide rests within the procurement of goods and services. The move toward decentralisation, answerableness, and democratic forms of government at the local level is gathering momentum (Klitgaard, MacLean, and Parris, 2000).In this context, the enormous costs of corruption are being explicitly recognized, as is the pressing need to correct governmental malfeasance (Klitgaard, MacLean, and Parris, 2000). Corruption is an entrenched symptom of misgovernance often reflected in p atronage, red tape, ineffective revenue-generating agencies, large racing shell bribery in procurement, and fai seduce to have services to city dwellers When the government needs a good or service, the city government has the two broad alternatives of making it or buying it that is, the city can provide the good or service itself, or rocure it from the private sector (Klitgaard, MacLean, and Parris, 2000). Corruption is one of the dimensions of this choice. Because contracting is where the money is, most government officials are tempted by the lure of procurement services often at the expense of the public. Recent developments and current trends are highlighting the role of accountants in governance. maiden among these are the increasing concern with arise levels of corruption, the re virginal of interest in accountability and transparency as inoculations against corruption the unused government focus on results, benchmarking and value-for-money (the new public management) and t he corresponding propel in the private sector through business process reengineering, cognition management and intranets where history systems play a major role decentralization and participation by citizens and NGOs in public management are multiplying the needs for credible accounting learning the privatization of utilities in several(prenominal) countries is increasing the need for regulation, in which accountants have a major role in simplification info asymmetry the globalization of collective pay has enhanced the need for global standards of accounting and auditing the Asian crisis has highlighted the weaknesses in transparency, in fiscal sector regulation and in corporate governance generally in a number of countries (Bennett, 2000). There are several measures that could be done in evidence to reduce the incidence of corruption. First, reducing the desktop and role of personality politics.An increase in public policy debates and other activities of government, openi ng night the closed doors, and permitting greater public interrogation of official processes would clearly have such an impact. Generally, the more public government personal business become, the less corrupt they can be (Bennett,2000). Enhancing the autonomy of the states subsystems would also reduce the likelihood of corruption. This could be pursued, for instance, by creating an effective gracious service system or deservingness system or opening up grass-roots political involvement. Such reforms would cripple the centralization of recruitment and thereby temper the faithfulness patterns that currently prevail. modify the autonomy and role of Congress or democratizing corporate organizations would be steps in this direction (Bennett,2000). Strengthening social organizations would also impinge on corruption. This could be done by reducing the tutelary role of the state and decrease the dependency of social organizations on the state or by enhancing popular commentary into th e organizations themselves. Not only must businesses or unions articulate demands on the government, but such organizations must be structurally responsive to the demands of their constituents. Tying the component part of leaders of social organizations to criteria internal to the assort rather than those determined by the state would greatly inhibit current patterns of corruption (Bennett,2000). 5. 0 METHODOLOGYThis chapter will discuss the method of research to be used, the respondents of the study, the sampling technique, the instrument to be used, the validation of the instrument, the administration of the of the instrument and the statistical treatment of the selective info that will be gathered. Research methodology and Techniques for data collection This study will use the descriptive approach. This descriptive type of research will utilize interview, observation and questionnaires in the study. To illustrate the descriptive type of research, the police detective will be maneuver by Calmorin when he stated descriptive method of research is to gather information about the present existing condition. The purpose of employing this method is to describe the nature of a situation as exists at the time of the study and to explore the cause/s of particular phenomena.Proposed subject Population/ ingest The general population for this study will be composed of government officials and personnel in the procurement process, randomly selected private companies who have been involved in the bidding process and randomly selected citizens. I will use a combination of forgather and random sampling. First, I will clod the respondents from the government, the private sector and the public sector. To make the sampling easier for every specific thumping, I will seek the aid of any anti-corruption non-government organization to facilitate the names and addresses of the respondents or have them together in one place (i. e. in an organizational meeting) so that th e perspectives can be given in one session. I will break down one hundred (100) respondents per cluster for a total of three hundred (300) respondents. organisation of the Instrument For validation purposes, I will initially submit a sentiment questionnaire and after approval, the abide by will be given to five respondents from the government, private corporations and the public sector. After the survey questionnaire will be answered, I will ask the respondents for any suggestions or any necessary department of corrections to ensure further improvement and boldness of the instrument. I will again escort the content of the survey questionnaire to find out the reliability of the instrument.I will block off irrelevant questions and will change words that would be deemed difficult by the respondents, too much simpler terms. Administration of the Instrument The revise instrument will then be administered to the respondents of the study which will be chosen through a combination o f cluster and random sampling. I will cut the ten respondents who will be initially used for the validation of the instrument. I will also tally, score and tabulate all the relevant data in the survey questionnaire. Statistical Treatment of Data When the entire survey questionnaire will have been collected, the researcher will use statistics to analyze all the data.The statistical formulae to be used in the second and third part of the survey questionnaire will be the following 1. percent to determine the magnitude of the responses to the questionnaire. 2. Weighted mingy 3. I will use chi-square to relate the participation rate of the government employees, companies and the public sector. I will be help by the SPSS in coming up with the statistical analysis for this study. Resource, Confidentiality and other contemplation The survey respondents and interviewees identities will be held confidential. single I will have the knowledge on their identities and utmost secrecy will b e provided. Further, personalities who do not loss to be quoted in interviews will not be disclosed. REFERENCES. 1.Klitgaard, Robert, MacLean, Ronald and Parris, Lindsey, Corrupt Cities A concrete Guide to Cure and Prevention, Ics Press, 2000 2. Bennett, Anthony, The Role of invoice in Good Governance, In Carter, Williiam, Davies, Mark, El, Yassin and Ford, Kevin, Government ethical motive and Law Enforcement Toward global Guidelines, Praeger Publishers, 2000 3. Green, Vincent, An onrush to Investigating Corruption in Government, In Carter, Williiam, Davies, Mark, El, Yassin and Ford, Kevin, Government Ethics and Law Enforcement Toward Global Guidelines, Praeger Publishers, 2000 4. Morris, Stephen, A State-Society Approach to the Study of Corruption , Corruption & Politics in Contemporary Mexico, University of Alabama Press, 1991