Open Contracting and Latin America’s Corruption Fight

Irene Estefanía González / Inter-American Dialogue

On April 19, the Inter-American Dialogue in partnership with the Open Contracting Partnership hosted an event titled “Open Contracting and Latin America’s Corruption Fight.” This discussion, which was moderated by Michael Camilleri, featured panelists Lea Giménez, Minister of Finance in Paraguay, and Georg Neumann, Senior Manager at the Open Contracting Partnership. This conversation explored the merits and challenges of open contracting and other public transparency initiatives, focusing on the Paraguayan example in regional context.

Carlos Fernández, President of the Central Bank of Paraguay, offered opening remarks about Paraguay’s efforts to improve transparency. Corruption, or the exploitation of public office for private gain, has become a flash point across the region. Its prevalence has contributed to weakened institutions and poor governance. However, Fernández argued that Paraguay has benefited from sound macroeconomic policies which have led to stable economic growth. It is not completely immune to the risk of corruption though. Fernández acknowledged that his country’s institutions must be strengthened with the capabilities to prevent and address corruption. The central bank, along with other government agencies, has collaborated in transparency initiatives such as producing a Transparency Index or publishing a database of government expenditures and public salaries. Most importantly, there is an online anti-corruption portal where the public can denounce malpractice by public servants.

Additionally, Giménez explained the “transparency agenda” and its importance for Paraguay. Building an environment of transparency, she argued, builds public trust over how the government budgets public expenditures and uses tax revenues. If governments decide to change tax or fiscal policy, it will have a reputation and credibility, enabling it to enter into dialogue with the public and private sector. Giménez stated that today, “any Paraguayan can request any document from the government and we have to provide that information.” Therefore, the political will and public input that endorsed these implementations must be sustained long-term.

Neumann, on the other hand, explained the specific role of open contracting in fostering transparent governance. “Open contracting” is a set of disclosure tools that use timely, publicly-accessible open data about public-private contracts to increase competition, inform smarter decision-making, and foster public integrity. Paraguay has been a regional leader in embracing and implementing open contracting principles. When contracts are not transparent, corruption in these dealings ultimately incurs social costs because that money is being funneled from vital public services. Neumann argued that these processes are about engaging with the public: “If you open up your data and you don’t hear anything (in backlash) then you’ve done something wrong.”

Given the progress that has been made, there are still areas needing improvement. First, Giménez argued that the Paraguayan government must further engage with the public, whether civil society or the press, to generate demand for publicly accessible information. This may involve considering how this data can be presented effectively and constructively. Second, it involves training and pressuring public officials who may be reticent towards publishing information. Third, journalists must feel empowered to access information and hold governments accountable when discrepancies arise. Overall, there must be an open dialogue about its development to ensure these processes and cross-sectoral commitments are sustained.

During the Q&A, participants asked the panelists about the role of the judiciary in protecting transparency, whether similar processes could be applied to state-owned enterprises, and the coordination of an anti-corruption team across various government agencies.

Watch the full recording of this event here: