Team Led by CEU’s Mihály Fazekas Wins IMF’s Anti-Corruption Challenge

October 21, 2020

On Wednesday, October 7, the project team led by Assistant Professor Mihály Fazekas of CEU's School of Public Policy with Johannes Wachs, PhD graduate of CEU's Department of Network and Data Science took first place in the IMF's Anti-Corruption Challenge pitch event. Additional project team members are Oliver Basdavent, Liz David-Barrett, Agnes Czibik, Bence Toth and Alan Whitworth.

The team's winning project, "Public procurement corruption risks: Harnessing Big Data for better fiscal governance and growth" addresses the challenge question, "How might we create behavioral change and increased transparency to enable good governance and tackle corruption in the public sector?" To put the issue into context, the pitch points out that public procurement, or government contracting, constitutes a large part of public spending across the world and plays a crucial role in determining growth rates through the supply of infrastructure and public services.

Last Wednesday's event identified the top four projects, each of which receive $50,000 in seed funding project support by the IMF Innovation Lab (iLab) and sponsors, and acceptance into the iLab Accelerator Program, supporting projects in completing a proof of concept to realize the proposed idea. For the Anti-Corruption Challenge, Fazekas's team pitched a strategy for creating a policy-oriented global intelligence tool that identifies vulnerabilities to corruption in public procurement, and their financial cost. They proposed the creation of a dashboard, which will identify such vulnerabilities and costs for public finances.

"The pitch was a pilot project, so we've completed pilot analysis and the dashboard for five countries. Now we get support from the IMF to go expand the methodology for around 40 countries. That means not just data processing and putting it up on the web, but also working with country offices, the IMF, and also governments and the World Bank. So it's very supportive and we really hope to expand it as well deepen our engagement." said Fazekas.

According to the proposal, the tool will support "actionable policy recommendations for the IMF and the World Bank on public procurement governance, while promoting a constructive dialogue with their membership on broader governance issues." Through this tool, the team aims to support the IMF's work on strengthening independent oversight and transparency. Upon completion of the accelerator program, project teams will deliver a working proof of concept, final presentation, report and project deliverables including code and related documentation via open source.

Fazekas notes that the COVID-19 pandemic in particular will drive numerous government contracts in the coming months. "The pandemic, especially the emergency response, has by and large resulted in spending through public procurement systems. The immediate effect, for example, is when we suddenly need a lot more masks or equipment for hospitals. Those are government purchases, in which the government is buying from private companies. So right now there's a big surge in that particular type of spending and that shows up in our data." said Fazekas. "The long-term effect is an increasing recognition that quality public services, especially healthcare, is really important. So the importance and corresponding scrutiny on this type of spending, from building hospitals and buying machinery and supplies has gone up drastically. Our capacity to look at COVID-19 spending is a big plus and that there will be interest in that moving forward." he added.

The IMF's Anti-Corruption Challenge, co-sponsored by Swiss State Secretariat for Economic Affairs (SECO) with IBM Research lab as a technical partner, received over 120 submissions of collaborative projects from country authorities, civil society organizations (CSOs), and staff from the IMF and other International Financial Institutions around the world with the top eight most promising proposals shortlisted by the evaluation committee. Prior to the pitch event, eight finalist project teams were sent to an intensive "bootcamp" program in March led by the iLab and an external facilitator from the Lean Startup Co., where the teams learned innovation tools and methodologies and how to apply these to further develop their ideas.

Evaluation criteria for the challenge included the potential impact of proposal on governance or anti-corruption, relevance to the Fund's work, scale-ability, feasibility of developing a proof of concept within a year, team composition in terms of diverse skills, knowledge and readiness to facilitate solution development and implementation, as well as the novelty or innovation of proposal.

Reflecting on this win, Fazekas commented, "Sometimes research can feel hard, one finding, one paper at a time. But if it's good, scientifically relevant and interesting, and also has policy implications, I think it's really promising and can have an impact on the world. It starts from rigorous research, rolling your sleeves up, getting the data and cleaning it. My message is that it's worth all of the rigorous research and then translating it to the wider public and making that pitch video."

Watch the team's winning pitch in the challenge event video from October 7.