Blockchain technology as a panacea for procurement corruption in digital era

Authors

DOI:

https://doi.org/10.20525/ijrbs.v10i4.1222

Keywords:

Public Procurement, Corruption, Digitization, Blockchain, South Africa

Abstract

Corruption in public institutions is a significant problem that stifles economic, social and environmental development worldwide. This predominates when there is a lack of transparency, inadequate record-keeping, and low public accountability. Accordingly, the questions this paper intends to provide answers to are two-fold. Firstly, what are the recurring patterns of procurement corruption in the South Africa (SA) public sector? Secondly, how can digital technology deployment assist in checking this trend? The desktop method was adopted through literature examination of studies relating to corruption, procurement, blockchain and digitization. We conclude by proposing a model/framework for adopting and using blockchain technology in public institutions to minimise corruption and the time taken for contract document preparation and acceptance. This study contributed to knowledge by evaluating the issues associated with public procurement and how blockchain and digitization can be adopted to help stern the tide of corruption in public institutions.

References

Ababio, E., Vyas-Doorgapersad, S., & Mzini, L. (2008). Service delivery and under-expenditure: strategies towards effective control of public funds. Journal of Public Administration, 43(si-1), 3-15.

Accenture Labs (201)7. Blockchain for good: 4 guidelines for transforming social innovation organisations (www.accenture.com/ t20180102T200432Z__w__/us-en/_acnmedia/ PDF-68/Accenture-808045 BlockchainPOV-RGB. pdf#zoom=50)

Ambe, I. M. (2016). Public procurement trends and developments in South Africa. Research Journal of Business and Management, 3(4), 277-290.

Anthony, A. (2018). The use of e-procurement in the South Africa procurement law: Challenges and prospects, Law, Democracy & development: 22(1), 39-47.

Baranwal, P.R. 2(020). Blockchain Based Full Privacy Preserving Public Procurement, Research and Development, Talentica Software (India) Pvt Ltd, Pune. Pp. 1-15. https:// 10.1007/978-3-030-59638-5_1

Batran, A., Erben, A., Schulz, R., and Sperl, F., (2017). Procurement 4.0: A survival guide in a digital, disruptive world. Campus, Frankfurt.

Bolton, P. (2016). Public procurement as a tool to drive innovation in South Africa. Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad, 19(1).

Bromiley, P., and Rau, D., (2016). Operations management and the resource based view: Another view. J. Oper. Manag. 41, 95–106.

Carter, C.R., Kosmol, T., and Kaufmann, L., (2017b). Toward a supply chain practice view. J. Supply Chain Manag. 53 (1), 114–122.

European Conference on Information Systems: Beyond Digitization – Facets of Socio-Technical Change, ECIS (2018), AIS Electronic Library, Portsmouth, pp. 1-17.

Fast, L., and Coppi, G. (2019), Feb. Blockchain and Distributed Ledger Technologies in the Humanitarian Sector. Overseas Development Institute: https://www.odi.org/publications/11284-blockchain-and-distributed-ledger-technologies-humanitarian-sector.

Hardwick, F.S., Akram, R.N., and Markantonakis, K. (2016). Fair and Transparent Blockchain based Tendering Framework - A Step towards Open Governance, ISG-SCC, Royal Holloway, University of London, Egham, United Kingdom.

Härer, F. (2018). Decentralized business process modeling and instance tracking secured by a blockchain, in Bednar, P.M, Frank, U. and Kautz, K. (Eds), 26th

International, T. (2009). Global Corruption Barometer I. Secretariat.

International, T. (2020). What is corruption. International Secretariat. Retrieved 28th May from https://www.transparency.org/en/what-is-corruption

Kimeu, S. (2014). Corruption as a challenge to global ethics: the role of Transparency International. Journal of Global Ethics, 10(2), 231-237.

Kosyan N.G., and Mil'kina I.V. (2019). Blockchain in the public procurement system (2019) E Management, 2 (1), pp. 33–41. https://10.26425/2658-3445-2019-1-33-41.

Kumar, S. (2017). Blockchain: The solution to public sector corruption. November 2nd, 2017, Published in Articles: EE Publishers, Articles: PositionIT. https://www.ee.co.za/article/blockchain-solution-public-sector-corruption.html

Lindskog, H., Brege, S., & Brehmer, P.-O. (2010). Corruption in public procurement and private sector purchasing. Journal of Organisational Transformation & Social Change, 7(2), 167-188.

Mafunisa, K., & Nsingo, J. (Eds.). (2014). Safeguarding ethics and accountability in the public sector (2nd ed.). Jutan.

Mantzaris, E. (2014). Public procurement, tendering and corruption: Realities, challenges and tangible solutions.

Matlala, M., & Dintwe, S. (2013). Procurement fraud red flags in theSsouth African municipalities’ corporate governance. Conference Proceedings published by the South African Association of Public Administration and Management (SAAPAM),

Morabito, V. (2017). Business Innovation Through Blockchain, Springer International

Publishing, Cham.

Munzhedzi, P. H. (2016). South African public sector procurement and corruption: Inseparable twins? Journal of Transport and Supply Chain Management, 10(1), 1-8.

Nakamoto, S., 31 October 2008. Bitcoin: A Peer-to-Peer Electronic Cash System. Tech. rep. pp. 1-11. Available: https://www.bitcoin.org/bitcoin.pdf.

Nelson, P. (2018). Primer on blockchain: how to assess the relevance of distributed ledger technology to international development (www.usaid.gov/ sites/default/files/documents/15396/USAID-Primer- Blockchain.pdf)

Nicoletti, B. (2017). The Future: Procurement 4.0, inAgile Procurement, PalgraveMacmillan, Champp. 189-230.

Organisation for Economic Co-operation and Development, O. (2016)a. Public procurement for sustainable and inclusive growth: Enabling reform through evidence and peer reviews https://www.oecd.org/gov/ethics/Public-Procurement-for%20Sustainable-and-Inclusive-Growth_Brochure.pdf

Organisation for Economic Co-operation and Development, O. (2016b). Preventing Corruption in Public Procurement. OECD. https://www.oecd.org/gov/ethics/Corruption-Public-Procurement-Brochure.pdf

Perera, S., Nanayakkara, S., Weerasuriya, T. (2021). Blockchain: The Next Stage of Digital

Procurement in Construction. Academia Letters, proof. Pp. (1-10).

Rauchs, M. and Hileman, G. (2017). 2017 Global blockchain benchmarking study, Working paper [3040224], Cambridge Centre for Alternative Finance, University of Cambridge, 21 September.

Rauchs, M., Glidden, A., Gordon, B., Pieters, G., Recanatini, M., Rostand, F., Vagneur, K. and Zhang, B. (2018). Distributed ledger technology systems: a conceptual framework. Cambridge: Cambridge Centre for Alternative Finance, University of Cambridge (https://papers.ssrn.com/sol3/papers.cfm?abstract_ id=3230013)

Raycraft, R.D and Lannguist, A. (2020). How governments can leverage policy and blockchain technology to stunt public corruption- Report https://www.weforum.org/agenda/2020/06/governments-leverage-blockchain-public-procurement-corruption/

Sewpersadh, P., & Mubangizi, J. C. (2017). Using the law to combat public procurement corruption in South Africa: Lessons from Hong Kong. Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad, 20(1).

Srai, J.S., and Lorentz, H., (2019). Developing design principles for the digitalisation of purchasingand supply management. J. Purch. Supply Manag. 25 (1), 78–98.

The Republic of South Africa National Treasury. (2015). Public Sector Supply Chain Management Review, Pretoria, 0002 Private Bag X115, Pretoria, 0001 40 Church Square, Pretoria, 0002 Private Bag X115, Pretoria, 0001.

Thornhill, C. (2012). Improving local government transformation in South Africa. Administratio Publica, 20(3), 128-143.

Williams-Elegbe, S. 25, October, (2019). Public procurement, corruption and blockchain technology in South Africa: A preliminary legal inquiry: available at: https:ssrn.com/abstract=3458877.

Williams, S. (2007). The use of exclusions for corruption in developing country procurement: The case of South Africa. Journal of African Law, 1-38.

Williams, S., & Quinot, G. 2007. Public procurement and corruption: the South African response. South African Law Journal, 124(2), 339-363.

Xu, X., Weber, I., Zhu, L., Staples, M., Bosch, J., Bass, L., Pautasso, C., and Rimba, P. (2017). A Taxonomy of Blockchain-Based Systems for Architecture Design, in 2017 IEEE International Conference on Software Architecture (ICSA), 2017, pp. 243-252.

Zheng, Z., Xie, S., Dai, H., Chen, X. and Wang, H. (2017). An overview of blockchain technology: Architecture, consensus, and future trends, in Karypis, G. and Zhang, J. (Eds), 2017 IEEE.

Downloads

Published

2021-06-14

How to Cite

Ogunlela, O., Olabode, O., & Robertson, T. (2021). Blockchain technology as a panacea for procurement corruption in digital era. International Journal of Research in Business and Social Science (2147- 4478), 10(4), 311–320. https://doi.org/10.20525/ijrbs.v10i4.1222

Issue

Section

Interdisciplinary Studies in Humanities & Social Sciences