Digital tool exposes crony corruption in the most unexpected countries

An international group of researchers has built a ‘digital whistleblower’ exposing crony corruption in countries, like the UK and Sweden, that are widely considered transparent and uncorrupt. By pulling data on government contracts from across the EU, the DigiWhist project has devised an adept system of digital analysis to flag up when public funds are probably being misused.

What they have found is that countries like Ukraine, Slovakia, and the Czech Republic—all of which have recently overhauled their public procurement systems—have better publication systems than countries often lauded for public transparency and decency. Among other things, these publication systems serve to check crony corruption and commercial conviviality.

‘Say, I am the mayor and this is my wife, she owns a construction firm,’ explains project director Dr. Mihály Fazekas. ‘A road works contract goes up and there are five or six companies in the region that could fix the road. But I make sure that only her company can bid because I include some specific clause, like an engineering degree that only my wife’s employees have—basically, I come up with a criterion that excludes other bidders.

“This is a very robust indicator of corruption”

‘So we track personal connections as well as anomalies in the bidding process like unusual eligibility criteria or item descriptions. We track these things as input, these are the decisions buyers make to restrict competition, and compare them against the output of the bidding processes, like the number of bidders, or concentration of suppliers. So we follow the input and output features of the bidding process alongside the characteristics of buyers. These are all risk factors which, on their own may be unreliable, but taken together, are a very robust indicator of corruption risk for a given tender’.

However, fighting corruption is only one aspect of the project’s aspirations. More broadly, DigiWhist hopes to create tools that will fundamentally transform procurement process by doing things like openly mapping the legislation that guides government contracting and scientifically illustrating the benefits of simplifying the contracts themselves. Therefore, each of DigiWhist’s tools are like pieces in a much larger puzzle that represents the complex and often stubbornly bureaucratic world of public spending.

As Dr. Fazekas clarifies, DigiWhist mines data from all the steps of the public procurement process to produce a series of risk indicators that, when brought together, provide the most robust and scientific corruption index in the world. These indicators are then made accessible to the public through a series of tools and web portals including: national platforms that track and analyse government contracts (some of which have already launched in HungaryPoland, and Romania), a European Public Accountability Mechanism called EuroPAM that analyses, maps, and indexes procurement legislation across Europe, platforms that benchmark and rank procurement buyers (a pilot of which has launched in the Czech Republic), easy-to-use corruption risk assessment software for businesses and governments, as well as an app that will allow citizens to directly and anonymously report on misspent public funds.

“This is a major leap forward”

Beyond simply shedding light on the darkest corners of government spending, DigiWhist aims to put tools for understanding and reporting on this corruption into the hands of the public. As one of the project’s founders, Professor Alina Mingiu-Pippidi, explains, ‘we wanted to illustrate the connection between transparency and activism, so DigiWhist is digital-whistleblower: Digi-Whist’.

Though a number of these tools are still in development, DigiWhist’s findings are already being cited in studies by the European Parliament, in magazines like The Economist as well as in parliamentary debates across Europe, including discussions of electoral reform in the UK’s House of Lords and government transparency in Germany.

Likewise, a handful of pilot projects have also begun to show promising results. In the Czech Republic, for instance, the zIndex, which ranks local government spending according to indicators of Accessibility, Competition and Supervision in order to compare procurement practices against benchmarks, is being discussed for replication elsewhere.

The DigiWhist consortium partner Datlab has also successfully set up eProcurement platforms both in the Czech Republic and Slovakia, which David Ondrácka, the head of Transparency International Czech Republic, has called ‘a major leap forward’ in the fight against graft.

However, there is still a lot of work to be done. Dr. Fazekas explains that the world of government contracting continues to be ruled by ‘dense and legalistic thinking’ that limits competition for public tenders. Small companies who lack the resources or connections will continue to have trouble winning government contracts until the contracting process itself changes.

Likewise, there has been a great deal of emphasis placed on monitoring the process whereby tenders are posted and companies bid, while surprisingly little has been done to monitor contract outcomes. So although initiatives like DigiWhist that seek to open up and analyze procurement data are crucial for the prospect of procurement reform, more radical changes will only come with a wider reassessment of government contracting and the legal framework that underpins it.


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