INSTITUTIONALIZING SUSTAINABLE PROCUREMENT REFORMS: GOVERNANCE MODELS AND ACCOUNTABILITY MECHANISMS IN DEVELOPING ECONOMIES

Abstract

Public procurement was once simply an administrative task, but now it has become a more strategic policy tool that can help promote the economy, protect the environment, and create socially inclusive markets. Since many developing countries spend a large part of their Gross Domestic Product (GDP) with public funds, these countries’ procurement systems can help them achieve sustainable development goals through environmentally credible markets and socially inclusive economies. Although many developing countries have passed legislation that includes principles of sustainability in the area of public procurement, there is still a significant gap between formal regulatory commitments and the actual implementation of these principles. The effective institutionalization of Sustainable Public Procurement (SPP) is often limited by administrative weaknesses, limited technical capacity, the complexity of governance structures, and the risks of corruption.

This research examines how the governance models and accountability mechanisms used by developing countries impact the implementation of sustainability in their public procurement systems. The analysis is based on relevant theories of Neo-Institutionalism and Principal-Agent Theory, which are used to analyze the relative strengths and weaknesses of centralized procurement versus decentralized procurement versus hybrid systems of public procurement governance. This article contends that centralized public procurement governance models provide standardization and leverage the market; decentralized models of public procurement governance provide flexibility and innovation; and hybrid models of public procurement governance, which combine central policy coordination with decentralized implementation, achieve the best institutional balance to incorporate sustainability criteria into public procurement practices.

This research provides more information on how the use of accountability measures such as e-procurement systems, digital transparency systems, open contracting initiatives, and civil society monitoring can help reduce information asymmetry, limit the ability to abuse discretion, and increase compliance with sustainability goals. Sustainable procurement reforms were found to work most effectively when they adopted an integrated accountability framework that is based on both internal digital monitoring and external social monitoring.