Sunday, August 22, 2010

World Bank and UN procurement practices

Dear Colleagues

When I first had reason to study World Bank and UN procurement practices in the 1970s it was clear that there were issues in need of attention ... and equally clear that the work in improving procurement practices was totally inadequate to the problem at hand.

Over time the problems have grown ... and the procurement practices become more and more complex, but not really very much better. In fact, I would argue that the procurement practices are worse now than they were decades ago.

I have always been bothered by the World Bank's use of improved procurement procedures to address issues like corruption. This has the perverse effect that small efficient low cost suppliers can really never get anywhere near a World Bank procurement contract. The paperwork essentially limits bidding to those that really know the complicated procedures and everyone else is out of contention. As a result contract prices are way higher than they need to be ... and the public pays a big price.

This would be less of a problem if there was good cost accounting and systems to report the actual costs of work done under World Bank and UN funding. Such data are difficult ... perhaps impossible is a better word ... to obtain. The over-invoicing of World Bank and UN contracts is a huge problem ... but completely off the radar. Prices agreed are not easy to access ... and for good reason (that is for bad reasons!).

The very low status of the accounting function in the World Bank and the UN is part of the culture ... and critical to its inability to either be accountable internally, or to the greater public. I have been aware of the problem based on personal observation for a very long time ... but it was refreshing to read a book from 2008 called "Backstabbing for Beginners" by Michael Soussan that tells some of the story of accountability ineptness in the UN within the infamous UN Oil-for-Food Program for Iraq.

Once in a while the World Bank and UN does something remarkable ... and there is the ongoing hope that this could become the norm ... but change is going to be very difficult in large part because many of the key decision makers are well aware of the sort of embarrassment that good metrics would make visible.

I want to see good metrics deployed so that these organizations are made to account ... but while I work in one direction, the World Bank and the UN are marketing their practices into the educational sector so that the World Bank and UN practices are considered "best practice" when in fact they are nothing of the sort!

Metrics are powerful ... but nobody really wants to see what good metrics will show!

Peter Burgess

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