Advertisement

Public Procurement and Public Financial Management in Africa: Dynamics and Influences

  • Justice Nyigmah BawoleEmail author
  • Peter Adjei-Bamfo
Article
  • 13 Downloads

Abstract

How do public procurement practices influence effective public financial management (PFM) in Africa? Notwithstanding the several public procurement reforms to improve PFM in Africa, outcomes have not been sustainable. Prior studies have failed to explain this phenomenon. With a descriptive case study design based on comprehensive datasets, this paper explains this situation with three key factors underlying the public procurement environment in three African countries: Ethiopia, Central African Republic, and Ghana. From the agency theory lenses, these factors affect the agency cost in public administrative systems necessary for addressing the agency problems in public procurement management towards desired PFM outcomes.

Keywords

Public financial management Public procurement Principal agency theory Africa Ethiopia Central African Republic Ghana 

Notes

References

  1. Abdulai, A. G., & Hickey, S. (2016). The politics of development under competitive clientelism: Insights from Ghana's education sector. African Affairs, 115(458), 44–72.Google Scholar
  2. Adjei-Bamfo, P., & Maloreh-Nyamekye, T. (2019 Forthcoming). The ‘baby steps’ in mainstreaming sustainable public procurement in Ghana: A double-agency perspective. Journal of Public Affairs, e1902.  https://doi.org/10.1002/pa.1902.
  3. Adjei-Bamfo, P., Maloreh-Nyamekye, T., & Ahenkan, A. (2019). The role of e-government in sustainable public procurement in developing countries: A systematic literature review. Resources, Conservation and Recycling, 142, 189–203.CrossRefGoogle Scholar
  4. Ameyaw, C., Mensah, S., & Osei-Tutu, E. (2012). Public procurement in Ghana: The implementation challenges to the public procurement law 2003 (act 663). International Journal of Construction Supply Chain Management, 2(2), 55–65.CrossRefGoogle Scholar
  5. Betley, M., Bird, A., & Ghartey, A. (2012). Evaluation of public financial management reform in Ghana (pp. 2001–2010). Sweden: Final Country Case Study Report. Swedish International Development Agency (Sida).Google Scholar
  6. Chekol, G. A., & Tehulu, T. A. (2014). Public procurement reform in Ethiopia: Factors leading to effective public procurement implementation: The case of Amhara region. European Journal of Business and Management, 6(23), 153–158.Google Scholar
  7. Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of Management Review, 14(1), 57–74.CrossRefGoogle Scholar
  8. Ellram, L. M. (1996). The use of the case study method in logistics research. Journal of Business Logistics, 17(2), 93–138.Google Scholar
  9. Erridge, A. (2007). Public procurement, public value and the Northern Ireland unemployment pilot project. Public Administration, 85(4), 1023–1043.CrossRefGoogle Scholar
  10. Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. The Journal of Law and Economics, 26(2), 301–325.CrossRefGoogle Scholar
  11. Farazmand, A. (Ed.). (2002). Modern organizations: Theory and practice. Greenwood Publishing Group. USA.Google Scholar
  12. Gelderman, C. J., Semeijn, J., & Bouma, F. (2015). Implementing sustainability in public procurement: The limited role of procurement managers and party-political executives. Journal of Public Procurement, 15(1), 66–92.CrossRefGoogle Scholar
  13. Guess, G. M., & Ma, J. (2015). The risks of Chinese subnational debt for public financial management. Public Administration and Development, 35(2), 128–139.CrossRefGoogle Scholar
  14. Hadley, S., & Miller, M. (2016). PEFA: What is it good for? In The role of PEFA assessments in public financial management reform. London: Overseas Development Institute.Google Scholar
  15. Hendry, J. (2002). The principal’s other problems: Honest incompetence and the specification of objectives. Academy of Management Review, 27(1), 98–113.CrossRefGoogle Scholar
  16. Hill, C. W. L., & Jones, T. M. (1992). Stakeholder-agency theory. Journal of Management Studies, 29(2), 131–154.CrossRefGoogle Scholar
  17. Hirvi, M., & Whitfield, L. (2015). Public-service provision in Clientelist political settlements: Lessons from Ghana’s urban water sector. Development Policy Review, 33(2), 135–158.CrossRefGoogle Scholar
  18. Hofstede, G. (1980). Culture and organizations. International Studies of Management & Organization, 10(4), 15–41.CrossRefGoogle Scholar
  19. Ibrahim, M., Bawole, J. N., Obuobisa-Darko, T., Abubakar, A. B., & Kumasey, A. S. (2017). The legal regime and the compliance façade in public procurement in Ghana. International Journal of Public Sector Management, 30(4), 370–390.CrossRefGoogle Scholar
  20. International Monetary Fund, (IMF). (2009). Central African Republic: Poverty Reduction Strategy Paper – First Annual Progress Report (IMF Country Report No. 09/240). International Monetary Fund: Washington DC. Accessed on: 14/12/2017, From: https://www.imf.org/external/pubs/ft/scr/2009/cr09240.pdf.
  21. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.CrossRefGoogle Scholar
  22. Jones, D. S. (2006). Financial reforms of statutory bodies in Singapore: Control and autonomy in a centralized state. Public Organization Review, 6(3), 259–276.CrossRefGoogle Scholar
  23. Kauppi, K., & Van Raaij, E. M. (2014). Opportunism and honest incompetence - seeking explanations for noncompliance in public procurement. Journal of Public Administration Research and Theory, 25(3), 953–979.CrossRefGoogle Scholar
  24. Kühn, S. & Sherman, L. B. (2014). Curbing corruption in public procurement: A practical guide. Berlin: Transparency International. Accessed on: 14/12/2017, from: https://www.transparency.org/whatwedo/publication/curbing_corruption_in_public_procurement_a_practical_guide
  25. Leruth, L. & Paul, E. (2006). A principal-agent theory approach to public expenditure management systems in developing countries. IMF Working Paper No. 06/204: 1–45. Washington: International Monetary Fund. Accessed on: 21/01/2017, From: https://ssrn.com/abstract=934463.
  26. Lio, M. C., Liu, M. C., & Ou, Y. P. (2011). Can the internet reduce corruption? A cross-country study based on dynamic panel data models. Government Information Quarterly, 28(1), 47–53.CrossRefGoogle Scholar
  27. Mawenya, A. S. (2008). Preventing corruption in African procurement. In Occasional paper. Johannesburg: South African Institute of International Affairs (SAIIA).Google Scholar
  28. Neupane, A., Soar, J., & Vaidya, K. (2014). An empirical evaluation of the potential of public E-procurement to reduce corruption. Australasian Journal of Information Systems, 21, 21–44.Google Scholar
  29. Ochrana, F., & Pavel, J. (2013). Analysis of the impact of transparency, corruption, openness in competition and tender procedures on public procurement in the Czech Republic. Central European Journal of Public Policy, 7(2), 114–135.Google Scholar
  30. Parker, D., & Hartley, K. (1997). The economics of partnership sourcing versus adversarial competition: A critique. European Journal of Purchasing & Supply Management, 3(2), 115–125.CrossRefGoogle Scholar
  31. Perrow, C. (1986). Economics theories of organization. Theory and Society, 15(1–2), 11–45.CrossRefGoogle Scholar
  32. Peters, B. G., Pierre, J., & Randma-Liiv, T. (2011). Global financial crisis, public administration and governance: Do new problems require new solutions? Public Organization Review, 11(1), 13–27.CrossRefGoogle Scholar
  33. Peterson, S. (2010). Reforming public Financial Management in Africa. HKS Faculty Research Working Paper Series RWP10-048. John F. Kennedy School of Government. In Harvard University.Google Scholar
  34. Preuss, L. (2009). Addressing sustainable development through public procurement: The case of local government. Supply Chain Management, 14(3), 213–223.CrossRefGoogle Scholar
  35. Public Expenditure and Financial Accountability (PEFA) Secretariat (2010). Survey of PEFA partners’ use of PEFA assessments for internal processes. Washington, DC: Public Expenditure and Financial Accountability Secretariat.Google Scholar
  36. Public Expenditure and Financial Accountability (PEFA) Secretariat (2016a). PEFA 2016 Handbook Volume II: PEFA Assessment Field guide. Washington DC: PEFA Secretariat.Google Scholar
  37. Public Expenditure and Financial Accountability (PEFA) Secretariat. (2016b). Framework for assessing public financial management. Washington DC: PEFA Secretariat.Google Scholar
  38. Ross, S. A. (1973). The economic theory of agency: The principal's problem. The American Economic Review, 63(2), 134–139.Google Scholar
  39. Schapper, P. R., Veiga Malta, J. N., & Gilbert, D. L. (2006). An analytical framework for the management and reform of public procurement. Journal of public procurement, 6(1/2), 1–26.CrossRefGoogle Scholar
  40. Tesfahun, Y. (2011). Public Procurement Reforms in Ethiopia: Policy and Institutional Challenges and Prospects. A thesis submitted to the Addis Ababa University: Ethiopia.Google Scholar
  41. Thai, K. V. (2001). Public Procurement Re-Examined. Journal of Public Procurement, 1(1), 9–50.CrossRefGoogle Scholar
  42. Tobin, R. (2012). Descriptive case study. In A. J. Mills, G. Durepos, & E. Wiebe (Eds.), Encyclopedia of case study research (p. 289). Thousand Oaks: SAGE Publications, Inc..Google Scholar
  43. Transparency International (2011). E-procurement reduces opportunities for corruption and bribery. Brussels.Google Scholar
  44. United Nations (UN). (2017). Procurement Specialist 170394. Accessed on: 05/04/2017, From: https://uncareer.net/vacancy/procurement-specialist-170394
  45. Vaidya, K., Sajeev, A. S. M., & Callender, G. (2006). Critical factors that influence e-procurement implementation success in the public sector. Journal of Public Procurement, 6(1&3), 70–99.CrossRefGoogle Scholar
  46. Vyas, L., Hayllar, M., & Wu, Y. (2017). Bridging the gap-contractor and bureaucrat conceptions of contract Management in Outsourcing. Public Organization Review, 1–27.Google Scholar
  47. Wescott, C. (2008). World Bank support for public financial management: Conceptual roots and evidence of impact. In World Bank independent evaluation group working paper. Access: 20/03/2017. From http://ssrn.com/abstract=1169783.Google Scholar
  48. World Bank. (2003). Ghana 2003 country procurement assessment report. Washington, DC: Ghana Country Department.Google Scholar
  49. World Bank. (2004). Memorandum and recommendation of the president of the international development association to the executive directors on assistance to the Federal Democratic Republic of Ethiopia under the enhanced HIPC debt initiative. Washington DC: World Bank.Google Scholar
  50. World Bank. (2012). Why reform public procurement? Washington DC: World Bank.Google Scholar
  51. World Bank (2016). Heavily Indebted Poor Country (HIPC) Initiative. Accessed on: 14/12/2017, From: http://www.worldbank.org/en/topic/debt/brief/hipc
  52. Yeboah-Assiamah, E., Asamoah, K., Bawole, J. N., & Musah-Surugu, I. J. (2016). A socio-cultural approach to public sector corruption in Africa: Key pointers for reflection. Journal of Public Affairs, 16(3), 279–293.CrossRefGoogle Scholar
  53. Yin, R. K. (2003). Case study research: Design and methods (third ed.). London: SAGE Publication.Google Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Department of Public Administration and Health Services ManagementUniversity of Ghana Business SchoolLegonGhana

Personalised recommendations