Public Procurement Regulation does not automatically generate “horizontal” policy benefits

The Government of Namibia is discovering that the process of public procurement does not in and of itself generate economic, social and local benefits.

The issue of what should be the dominant drivers in public procurement policy has been developing for some time and as we read this article on the excellent AllAfrica website, it seemed to us that Namibia’s predicament exemplifies one aspect of the debate.

Public procurement in its most basic sense is the process by which the state purchases goods, works and services. That process is, at its heart, amoral and outside the scope of ethical considerations – left to its own devices, research suggests that competition to supply those goods, works and services will be distorted by practices which are unfair, lack transparency and treat participants differently.

Regulation can positively influence that distortion by imposing procedures which mitigate the impact of those practices. But, here’s the thing: regulation will only do what it sets out to do. If the object of regulation (as in the EU, for example) is predominantly the opening up of markets to competition, no amount of hand-wringing will bring about social and economic development, or prevent large, foreign competitors who can bring to bear economies of scale from preventing local businesses from gaining a foothold.

The Namibian Government aims to implement “horizontal” social, economic and localism policies through the tool of public procurement regulation – learning to hard way that only what you put into the regulatory framework impacts what you get out of it.

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