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Open Contracting Gaining Momentum


March 20, 2013

Doug Hadden, VP Products

Open procurement improves government costs and reduces corruption. That’s the theory that was discussed last night at an open house at the OpenGovHub sponsored by the Open Contracting initiative. The discussion was focused on ‘fragile states’.

FreeBalance has been active in the discussion of how technology (“ICTs”) – in particular – Government Resource Planning (GRP), can be used to improve governance in developing countries. (Such as this scenario on how e-procurement and back-office procurement reduces corruption ).

As you can see from the ‘storify’ from last night, the discussion was somewhat derailed by yours truly when I was asked to comment during the panel. It has been my impression that many in the development community tend to give the effects of technology short shrift. And, to conclude that transparency via technology does not have positive effects because technology is not fully inclusive. Our Governance Framework describes the net positive effects of technology and the force multiplier of institutional characteristics such as autonomy, capacity and political will. My point is that technology does have a governance effect even when some institutional factors remain sub-optimal:

  • Controls in back-office systems prevent many inefficient and corrupt practices through IT security, workflow, approval cycles etc.
  • Transparency in public finances, especially when there is no data manipulation capabilities between the back-office systems and the front-office portals, changes behaviour.
  • Audit trails and reporting tools make corruption and poor practices easier to identify. This also changes behaviour.

We also must have a pragmatic approach to sequencing governance. We should expect that foreign businesses, international rating agencies, the diaspora and academics will be the first operational users for an e-procurement portal. And, that use of portals will become more inclusive as capacity is built in civil society and mobile technology becomes more affordable.

I also find that some in the development community expect that transparency initiatives have failed to achieve benefits because there has not been a rapid improvement in an outcome such as service delivery. Government initiatives take time to have measurable affects. And, an initiative such as an e-procurement portal may not have been conceived to improve service delivery. Perhaps improved prices through competition and reduced collusion through transparency are the expected results. And, an improvement in service delivery to businesses via an e-procurement portal is not likely to have any effect on a citizen survey about service delivery.

Therefore, we should not curb our enthusiasm for open contracting and open procurement. Transparency is a governance enabler, and it’s up to the development community to help phase-in governance initiatives based on the country context.

Open Contracting: is procurement transparency enough?

Very interesting discussion at the Open Contracting open house at the OpenGovHub earlier today. It all started out innocently enough until FreeBalance got into the act..

Storified by · Wed, Mar 20 2013 06:09:45

this is the storify of a previous #opencontracting presentation at @icgfm
Cat herding at @opengovhub
.@FelipeEsteven speaking at #opencontracting
One of the more interesting lessons about open procurement is the extent to which the biggest initial users are the diaspora (which may have an effect on remittances), risk analysis agencies and foreign companies.
Claire Schouten speaking on @opencontracting in fragile states
Claire Schouten highlights need to understand context for ICTs for #OpenContracting in Fragile States @Integrity_JoyOpen Contracting
Claire Schouten: found that diaspora most interested in some #transparency initiatives @opencontractingFreeBalance
Great #opencontracting lesson: reach out to diasporaFreeBalance
#procurement #transparency in fragile states inc #Afghanistan #Liberia #Timor @opencontractingFreeBalance
Claire Schouten: Karzai in #afghanistan requiring @opencontracting in futureFreeBalance
Claire Schouten: sees #ICT4D as enabler for #accountability @opencontractingFreeBalance
Factors beyond technology such as civil society capacity was discussed. This is a great slide on the ‘accountability chain’.
Claire Schouten: what’s lacking is outreach to beneficiaries @opencontractingFreeBalance
Conversation at #opencontracting focus on political change + #civilsociety away from technologyFreeBalance
Claire Schouten: human capacity biggest problem to sustain @opencontractingFreeBalance
Yes, #opencontracting, #civilsociety capacity building critical to leverage #transparency effectivenessFreeBalance panel at #opencontracting discussion @felipeestefan @Integrity_Joy @chrisalbon @frontlinesms @KatrinskayaOpen Contracting
There were some technology observations that were interesting.
"Important for #OpenContracting to visualize data understood by public," @Mark_Brough of @TAInitiative at @OpenGovHub HH #ICT4D #Edem #odtaICT4Gov
a solution that works in one place, is not necessarily going to work in another place – @chrisalbon #opencontractingOpen Contracting
@opencontracting maybe, depends on agility in design & methodology #opencontractingFreeBalance
what #opencontracting and #opendevelopment really is talking about is #opendata – @chrisalbonOpen Contracting packed house discussing ICTs for #OpenContratcting in Fragile States @opengovhub @Integrity_JoyOpen Contracting
There were some observations about the impact of technology enabled repression and corruption. My sense is that technology enabled repression is an outlier to the general trend towards openness. And, see further down, transparent contracting will have the net effect of reducing collusion.
#opencontracting point: always risks in #socialmedia & #transparency but #privacy protection tools availableFreeBalance
Point that #opencontracting may not work if there is collusion. Yet brings in foreign companiesFreeBalance
We seem to be channeling @evgenymorozov at #opencontracting on repressive risk with #mobile & #socialmediaFreeBalance
POV: #ict could be used to encourage local vendors similar to US small biz procurement #opencontractingFreeBalance
Then, in the midst of the panel discussion, I was called to clarify some of my tweets. As we often see in technology-enabled governance discussions, the theme moves to: ‘tech is only part of the solution’ (and, not the most important part.)
#opencontracting panel
We went to an #opencontracting event & a hockey game broke out? FreeBalance asked about our #governance frameworkFreeBalance
My first point is that we often fail to recognize the immediate positive governance impact for any tech initiative, particularly in Public Financial Management (PFM)
Mind you, this ‘cart before horse’ talk doesn’t recognize impact of tech-enabled #transparency, #opencontractingFreeBalance
@piblogger1 saying that, #transparency changes behaviorFreeBalance
Analysis by former #Imf staff member found intro of #grp system eliminated 7 points of #corruption #opencontractingFreeBalance
I discussed our governance framework that shows the impact of technology that is leveraged by institutional conditions.
#opencontracting here’s the link about the effects of #GRP in #Afghanistan
Follow up on #governance framework discussed at #opencontracting &
Basic premise behind #ICT-enabled #governance in fragile states described at #opencontracting
back-office controls, IT security, front-office #transparency & decision-making tools enable good #governance
#governance enablers like political will, autonomy, capacity leverages tech #opencontracting
#opencontracting: here’s a scenario showing #PFM impact to reduce #corruption

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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