The roles of principal-agent-client in corruption at the public procurement sector in Malaysia : an exploratory study

Abstract

Corruption in public procurement poses a significant challenge to governance and economic development, particularly in Malaysia, where it undermines public trust and results in substantial financial losses. This study explores the dynamics of corruption in public procurement, with a focus on the collusive behaviours among key actors: principals, agents, and clients, that facilitate corrupt practices. Anchored in the Principal-Agent-Client (PAC) theoretical framework, the research highlights how asymmetric information and incentive-driven behaviours create vulnerabilities in the procurement process. Using a qualitative approach, the study employed thematic and content analysis through ATLAS.ti to analyse data from multiple sources, including in-depth interviews with 15 experts, face-to-face interviews with seven incarcerated individuals, and the examination of 30 case files provided by the Malaysian Anti-Corruption Commission (MACC). Findings reveal that collusion is perpetuated by structural inefficiencies, such as weak oversight mechanisms and gaps in transparency, which existing anti-corruption measures fail to adequately address. The study offers a new theoretical angle complementing the existing knowledge of how systemic factors interrelate with collusive behaviour in corruption. It puts forward a framework for future research on combating collusion and corruption in public procurement. Therefore, by addressing the root causes of corruption, it provides insights for policymakers and enforcement agencies on combating collusion, promoting integrity, and strengthening governance in public procurement.