Corruption in public procurement can happen in many different ways. These range from the most common form of upfront bribery and facilitation payments to more subtle forms of political corruption. In countries where corruption is a common problem it tends to disturb the market mechanisms and impede economic development. Corruption in public procurement makes the officials or the politicians in charge purchase goods or services from the best briber, instead of choosing the best price-quality combination. According to Transparency International some of the manifestations of corruption in public procurement are:
Bribes vs. Facilitation Payments: Bribes are usually larger amounts given to senior officials (decision makers) to obtain a favourable decision where no right or claim to such decision exists, whereas “facilitation payments” usually are relatively smaller amounts paid to usually lower level officials to accelerate/facilitate a decision. Both are forms of corruption and constitute illegal behaviour in most countries.
Supply vs. Demand: The initiative for bribing can originate with the bribe giver or the bribe taker for a favour on either side.
Cartel or Collusion: Bidders often form a cartel, which then tries to manipulate the award decision in favour of one of their members, with or without the involvement of a corrupt inside official. Collusion agreements can include, for example, assigning “turns” among the cartel members for winning public bids, or agreeing to internal compensation payments for submitting high or other “failed” bids.
Structural vs. Situational: Corruption in a business context usually is “structural”, meaning it is well planned and prepared and carried out systematically. Occasions for “situational” corruption are unplanned, e.g. when a person driving a car under the influence of alcohol is caught by the police and offers the policeman a bribe so as to induce him not to prosecute him.
