The Private Whistleblower: Defining a New Role in the Public Procurement System

Due to EU legislation, public procurement through competitive tendering has been applied in most European countries. One purpose of such procurement is to lower the costs of the procured service and another is for the political level to gain better control over what it is purchasing. However, monitoring problems exist when conducting public procurements; recent studies indicate that actions related to public servant corruption are most common in public procurement processes. Citing cases from Sweden, this article argue that, in the case of public procurement, private firms have assumed a monitoring role towards the public sector similar to that of whistleblowers, and that the public system in fact depends on private firms to detect procurement bypasses committed by civil servants. This article provides an understanding of this monitoring role and discusses its theoretical and practical implications for the public system. I conclude that upholding the public system is not the primary objective of the private whistleblower but a positive side effect. The monitoring role is analyzed in the framework of principal–agent theory and should be seen as complementary to the existing monitoring functions available to public principals.