Procurement Conspiracies and Procurement Governance: Some Lessons from Thailand

Abstract

Network relationships are nothing new. Worldwide social networking has indeed exploded within the past decade. Network relationships facilitate efficient interaction by reducing the three components of transactions costs: information and search costs, negotiating and contracting costs, and policing and enforcement costs. Whether in business or politics, or any other area of interaction, network relationships play an important role and help to create efficiency. Indeed, investment into creating trust, brand loyalty, recognition and reputation, whether in personal or business relationships, are part of the process of networking. Trust implies confidence that some person or institution will behave in an expected way. But there are also built-in dangers when networking turns into conspiracy aimed at siphoning public funds into private coffers, particularly through connected dealings in public procurement. Often the status quo is preserved and situations of monopoly are created to facilitate transactions with corrupt intent.