Procurement reform in the Philippines: the impact of elite capture and informal bureaucracy

Abstract

PurposeThe purpose of the paper is to examine features and impact of recent reforms introduced by the Philippines government to deal with the longstanding shortcomings in its procurement system.Design/methodology/approachThe research for the paper is based on reports by international organizations, official documents of the Philippines government, surveys by international and domestic organizations, interviews with relevant officials and media reports.FindingsThe findings show that the reforms have focused on fostering competition, increasing transparency, standardizing procedures, enhancing end‐product quality and contractor reliability, ensuring proper planning and budgeting, combatting corruption, and strengthening accountability. These reforms were intended to create a procurement system more in line with international best practices. However the paper shows that the impact has been less than promised. This is due to limitations of certain provisions of the reforms and weaknesses in both implementation and in the accountability of the procuring entities. A key factor in undermining the reforms is widespread corruption, which continues to affect many aspects of the procurement system. The article identifies two important and related reasons for such failings: elite capture of the government and bureaucracy by a powerful network of business leaders from well‐established landed families, who have close links with the political establishment; and second, a long‐established culture of informal influence in the Philippine state bureaucracy (what may be termed the informal bureaucracy), which has been used to maximum effect by the elite network of business leaders. As a result, this network has been able to influence the reforms to serve its own interests and ensure its continued dominance of the procurement market.Originality/valueThe value of the paper is to show how administrative reforms, no matter how well formulated they are, may be readily undermined in the process of implementation by elite groups able to influence government bureaucracy through an informal culture.

State capture and development: a conceptual framework

“…By influencing the award of public procurement contracts, eg through requiring certain advisers to be used, appointing allies to evaluation committees, or directly exerting pressure on procurement officers, captor groups can gain access to vast shares of public spending. Elites block reform of the legal and institutional framework of the procurement process so as to better control it (Seth Jones and Cheung 2013 ) or focus on influencing the implementation phase through appointments and decision-making (Charron et al 2017 ; Dávid-Barrett and Fazekas 2020 ; Mwenda 2005 ; Williams-Elegbe 2018 ).…”

ASEAN Regional Integration: The Philippines' domestic constraints to Physical connectivity

“…A report by the Presidential Anti-Corruption Commission (PACC) identified the DPWH as one of the most corrupt government agencies (Depasupil, 2018). Deep-entrenched and widespread corruption happens in the procurement subjected to elite capture and the informal bureaucracy (Jones, 2013;Johnston, 2010). Along with crime, red tape is also prevalent (Parrocha, 2019;Romero, 2019) and has consistently compromised the competitiveness of the country (ADB, 2009).…”

Effect of procurement policy on aid inflows in the Pacific: accounting for economic growth and financial development in Fiji

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