Regulatory Simplification, Inclusive Public Procurement, and Integrity : An Integrated Approach - Diagnostics and Recommendations from Oaxaca, Mexico

Overview & Synopsis

This document presents the findings and recommendations of a pilot initiative designed to demonstrate that public procurement can contribute to productive inclusion and create new opportunities for market access for sectors and territories characterized by high levels of informality, cultural diversity, and institutional lag. This diagnostic is based on the ongoing collaboration between the World Bank and the Government of Mexico and responds to a request for technical assistance from the Ministry of Anti-Corruption and Good Governance (Secretaría Anticorrupcion y Buen Gobierno, SABG) and the Ministry of Economic Development of the State of Oaxaca (Secretaría de Desarrollo Económico del Estado de Oaxaca, SEDECO) to support the creation of economic opportunities for micro and small-scale agricultural producers. The central question guiding this diagnostic is straightforward: what prevents agricultural producers from integrating into the formal market and, consequently, from having the conditions necessary to participate competitively and effectively as suppliers to the State through public procurement processes? The evidence collected points to a combination of regulatory, operational, financial, and institutional barriers that the current system not only fails to address, but in some cases actually exacerbates. This diagnostic seeks to address this issue through a comprehensive, participatory, and dual-perspective approach (public sector and private sector), based on multiple sources of information in the state of Oaxaca, with the objective of identifying specific barriers and proposing lines of action to facilitate the integration of micro and small-scale agricultural producers into formal markets and, in particular, into the public procurement system. The report presents information and evidence collected over a twelve-month period through consultations with local agricultural producers, municipal, state, and federal public officials, civil society representatives, and legal experts. It also incorporates complementary methodological tools, such as mystery shopper exercises, questionnaires, statistical analysis, and legal and documentary review.