The following article was written before the 2018 Mexico General Election, and demonstrates that open data could potentially be the key factor, in fighting corruption.
The most surprisingly silent candidate is José Antonio Meade of the incumbent Institutional Revolutionary Party, who would benefit from showing off his party’s progressive transparency initiatives. In recent years, Mexico has become one of the most advanced countries in the Organization for Economic Co-operation and Development (OECD) in terms of a national open data policy, currently ranking 5th out of the 35 member countries in the OECD.
This achievement is no accident. It is the consequence of a deliberate mandate from the federal government to increase transparency and accountability in Mexico by making public data more accessible. But as these initiatives take off, is the optimism surrounding open data as a means to curb corruption warranted? Put simply, is the strategy paying off?
To find out, we first must agree on how we can measure success. In cross-national studies, the Corruption Perception Index (CPI) released every year by Transparency International is the benchmark to understand which countries are making progress against corruption.
Clearly, a new metric is needed in order to move past perceptions and into fact. This is where open data is critical. Using data sets released by governments, a number of proxy indicators for measuring corruption have been proposed over the last few years. One of these indicators is the Corruption Risk Index (CRI). Developed by Fazekas and Kocsis, it is comprised of publicly available official electronic records of over 2.8 million government contracts in 27 EU members states (plus Norway) between 2009 and 2014. The CRI measures corruption risk in public procurement through a composite index of “red flags” (eg. single bidding in competitive markets, recurrent use of “direct” or “emergency” awards) that signal potential corrupt practices. While none of these are necessarily corrupt practices in and of themselves, they provide data points that signal a higher likelihood of a corrupt environment.
A version of the CRI was employed by the Instituto Mexicano para la Competitividad (IMCO) in a study released earlier this year on Mexico’s public tendering system. Using a database of 700,000 records from the federal government between 2012 and 2017 (amounting to 10% of the total spending in those years) IMCO made two important findings:
- 80% of the contracting in the period was awarded to 1.9% of the bidders (2,512 out of 129,411); and
- 71% of the contracts awarded to the top 1,000 bidders was through direct adjudication.
Again, these findings are not evidence of corruption, but they do expose Mexico’s tendering system as one that lacks competition. One can reasonably conclude from this that the government is not fully capitalizing on technology to reduce costs in procurement, and that the risk of corruption is high in the current system.
"The impact of corruption...definitely impacts the cost of investment"
Luis Gerardo del Valle
Head of tax affairs, American Chamber of Commerce of Mexico
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