“Bad governance and corruption have long been recognized as impediments to growth, peaceful social orders, and good environmental standards at the national level. Corruption is also a global phenomenon. It not only thrives domestically from vulnerabilities in governance system; it can also be transnational. For example, foreign companies can bribe local officials to gain advantages on specific markets, while perpetrators can conceal the proceeds of corrupt acts in foreign countries. International financial institutions, including the IMF, have put good governance and the fight against corruption at the core of their work to promote global economic stability. Nevertheless, the lack of data and actionable indicators have long made it difficult to fight corruption effectively and to monitor results. This has started to change with the increasing availability of large-scale datasets on government activities such as contract-level public procurement datasets.

Mihaly Fazekas, CEU and GTI, shared insights into cutting-edge methods of measuring corruption risks in public spending, and showcasing selected applications of new methodologies in policy analysis. He started with a brief overview over various methodologies of measuring corruption, from expert scoring over perceptions and experiences or enforcement-based indicators to proxy measures. The latter are innovative in that they combine individual, micro-level data with administrative records, allowing the construction of macro-relevant indices for a variety of sectors. Public procurement is particularly relevant, given that approximately 15 percent of global gross domestic product flows through public procurement systems. Rooted in a thorough qualitative understanding of what behavior constitutes corruption in public procurement – avoiding competition to favor a certain bidder – objective, de-facto, individual-level risk indicators can be formulated for buyers, suppliers, tendering process as well as political connections. ”

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