Emergency Procurement and Corruption

Emergency situations require prompt action. Natural disasters, catastrophes, or other exceptional events such as pandemics are managed by extraordinary means and put extreme stress on a procurement system (Butler, 2021). Those stresses in turn can open opportunities for corruption. As the world continues to respond to crises, it is critical to understand how procurement corruption in an emergency arises—and how it can be checked. While this chapter reviews lessons from different public emergencies across the centuries, their lessons are likely read most starkly against the recent global emergency presented by the Covid-19 pandemic. The pandemic demanded immediate emergency supplies and procurement systems were generally unprepared. Monopsonistic assumptions collapsed, and corruption seeped through the gaps forced open by the pandemic (Folliot, Lalliot , and Yukins, 2020). The pandemic presented a peculiar emergency as it simultaneously affected the entire world—not simply a specific country or region—and demonstrated that ‘corruption’ in emergency procurement can be understood as a system breakdown, not a normative abstraction or a moral failure. This is because the procurement systems that fared best (which suffered the least apparent disruption) were often those with the soundest internal structures, and because, while there were individual instances of perceived corruption in the emergency, the forces of social cohesion and reform which bind procurement systems (and nations) generally helped repress that corruption. The pandemic may have presented a unique sort of crisis because the moral and social imperative—restoring health—was so obvious and pressing that it tended to crowd out normal petty corruption, such as bribery or fraud. Instead (with exceptions, of course), the procurement failures—the ‘corruption’ during this global emergency—during the recent emergency were more structural in nature (OECD, 2020a). Although any number of different theoretical approaches can be used to understand corruption and failures in public procurement—e.g., principal/agent theory, collective action, institutionalism, and game theory—this most recent emergency showed that, while all of these theories bear relevance, in the pandemic, there was time only for the most practical of approaches, and having a sound structure was a key ingredient to avoiding corrupt breakdowns in an emergency. Different countries experienced different obstacles, which, though sometimes blamed on ‘“corruption,”’ also highlighted system failures: the European Union largely failed in a joint effort to buy critical supplies; the United States attacked ‘price gougers’ but only half-heartedly; divisive and pervasive political distrust undermined the U.S. government's ability to coordinate emergency procurement; and in the United Kingdom, as in the United States, procurement officials rashly relied first upon known suppliers (in the UK, on politically connected suppliers). Experiences over many centuries in Europe and the United States (the focus of this chapter) thus show that collective action and social cohesion remain important in an emergency. The normative construct of ‘“corruption as evil’” also remains relevant—but a more practical approach, grounded in basic concepts of accountability and effective public management, has consistently proven essential in an emergency, and points the way towards future reforms based on transparency and open contracting. This chapter proceeds in several parts. After an introduction which reviews how public procurement systems operate in an emergency, the next part reviews how different emergencies manifest different sorts of systemic failures—failures in competition, for example, or in officials’ professionalism. The chapter then turns to examples of emergencies and the lessons learned, and then (in the next part) to how digitalization is emerging as a critical solution to corrupt failures in emergency procurement, in no small part because transparency creates social pressure much more quickly when corrupt failures emerge in a procurement system. That, in turn, suggests a ‘bottom-up’ approach, discussed in the next part: transparency to ensure public engagement and thus procurement integrity in an emergency. On this last note, the chapter concludes by highlighting the need for social conscience to reinforce a procurement system’s integrity, even in times of the darkest peril.