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Forum for the Future of Aid

Southern Voices for Change in the International Aid System Project

The Forum on the Future of Aid is an online community dedicated to research and opinions about how the international aid system currently works and where it should go next

organised by ODI

Buying Power Aid, Governance and Public Procurement

Author: Olivia McDonald, Christian Aid

This paper analyse the importance of government procurement systems as one of the most controversial aspects of the good governance agenda.
It stresses the importance of procurement systems “as a major tool for promoting development strategies, since governments tend to be the largest single consumers of goods and services. A government’s use of purchasing can thus be a very significant tool to achieve socio-economic objectives. If procurement reform is done accountably, with a view to achieving both cost-effectiveness and broader development goals, it can play a powerful role in poverty reduction.”
The paper states that while one of the main aid-effectiveness commitments is to increase the use of country systems, donors’ use of national procurement systems is, in part, linked to the degree of liberalisation of those systems. “This link to liberalisation is alarming when set against the failure of donors to stop aid-tying, which allows them to ensure domestic firms secure aid-funded contracts”.
The paper places a set of recommendations to reform Aid effectiveness commitments related to the use of local procurement systems and how donors should engage in procurement reforms.

To read the full paper, click here


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