"When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely, in your thoughts, advanced to the stage of science, whatever the matter may be."
Lord Kelvin

Corruption Risks and the New Public Procurement Act in Hungary. The CRCB Working Group’s Assessement on the Act CXLIII of 2015 on Public Procurement.

May 26 2016

In this report the legal and procurement working group of CRCB reviews the new Hungarian Public Procurement Act (CXLIII. Act 2015) which came into effect in October 2015. The analysis focuses on four areas: the preparation process of the bill (i); the expected impacts of this new act on the transparency of public procurement, (ii) competitive intensity (iii) and corruption risks (iv).

The results show that public consultancy had a minor role in the preparatory process of the bill; several government decrees were published only some days before they came into effect. The fact that the public procurement act, adopted in October 2015, had to be amended within a month demonstrates that the act, itself did not contribute to legal certainty.

The analysis of competitive intensity, transparency and corruption risks suggests contradictory effects of the new public procurement act on these areas. On the one hand, in case of competitive intensity the positive effect can be so strong that it can both increase and decrease intensity, on the other hand transparency gets further restricted rather than increased due to the new act.

In case of corruption risks, the outcome is clearly negative: we estimate that the new public procurement act makes decisive steps towards a regulation that allows a higher level of corruption risks.

 

(report in Hungarian with English abstract, pdf )