Across Latin America and the Caribbean, governments face a common challenge: how to deliver better results for citizens amid fiscal constraints, growing social demands, and increasingly complex environmental and development challenges. In this context, the question is no longer simply how much governments spend, but how effectively public resources are used to generate public value.
Public procurement is one of the most powerful policy instruments available to governments to advance sustainable development. Every year, public institutions spend billions of dollars acquiring goods, services, infrastructure, technology, and essential public works. In Latin America and the Caribbean (LAC), public procurement represents approximately 12–15% of GDP and up to 30% of public expenditure, making it one of the largest drivers of economic activity in the region.
Because of its scale, public procurement can shape markets, influence business behavior, and accelerate progress toward sustainability goals. Procurement decisions can promote greener production and consumption patterns, support innovation, expand opportunities for inclusive participation, strengthen transparency and integrity, create decent jobs, and improve access to essential services. Public procurement is therefore more than an administrative process: it is a strategic means of turning public spending into tangible social, economic, and environmental outcomes.
Recognizing this potential, countries across the LAC region have increasingly embraced a broader vision of procurement that goes beyond compliance and cost savings. A recent assessment conducted by the Organization of American States (OAS), in its role as Technical Secretariat of the Inter-American Network on Government Procurement (INGP), examined progress made by 22 countries in implementing regional recommendations aimed at positioning public procurement as a driver of public value. The analysis revealed important advances in digitalization, transparency, sustainability, innovation, professionalization, and data-driven decision-making.
Yet the findings also highlight a persistent challenge: translating policy commitments into measurable results.
Sustainable procurement provides a clear example. While approximately 40% of participating countries have incorporated sustainability criteria into their legal and institutional frameworks, many continue to face difficulties in measuring the environmental and social impact of procurement decisions. The challenge is no longer defining sustainability as an objective; it is demonstrating how procurement contributes to reducing environmental impacts, supporting resilient economies, and advancing the Sustainable Development Goals (SDGs).
A similar implementation gap emerges in efforts to improve the quality and efficiency of public spending. Nearly half of the countries surveyed reported having strategic plans to enhance the use of public resources, yet only a small proportion have fully implemented those plans. This suggests that achieving greater value for money requires more than regulations or digital platforms. It requires stronger planning, market engagement, risk management, performance measurement, and a closer connection between procurement decisions and broader public policy objectives.
People are equally central to this transformation. More than 27,000 public officials across the region receive procurement-related training each year. However, relatively few countries have established professional career pathways, competency frameworks, or certification systems for procurement officials. Building sustainable procurement systems therefore depends not only on technical tools, but also on investing and training public servants responsible for managing public resources and delivering results for citizens.
Despite these challenges, the region has made notable progress. Governments are increasingly integrating sustainability considerations into procurement frameworks, strengthening transparency mechanisms, adopting digital solutions, leveraging data analytics, and promoting innovative approaches to purchasing. Together, these advances reflect a growing recognition that procurement can serve as a catalyst for sustainable development rather than simply administrative and transactional function.
Regional cooperation has played an important role in supporting this transformation. Through the INGP, the OAS and strategic partners — including the Inter-American Development Bank (IDB), the International Development Research Centre (IDRC) of Canada, the Caribbean Development Bank (CDB), and CAF – Development Bank of Latin America and the Caribbean — have supported LAC countries in exchanging experiences, developing and implementing practical tools, strengthening institutional capacities, producing guidelines and diagnostics, advancing common standards, and adopting regional declarations that articulate shared principles and commitments for the transformation of public procurement, in collaboration with other key stakeholders.
As a result, governments are better equipped to use evidence and data analytics to improve decision-making, identify risks, prevent inefficiencies, and increase the impact of public spending. These efforts have also helped reduce implementation barriers and address common challenges through methodologies and self-assessment tools supported by more than 500 quantitative and qualitative indicators. These resources enable governments to assess institutional maturity and supplier capacity, implement sustainable procurement criteria, evaluate performance and impact, strengthen supplier engagement, and expand the participation and capabilities of micro, small, and medium-sized enterprises (MSMEs).
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A notable example is the INGP’s Sustainable Suppliers Self-Assessment Tool (HAPS), which has supported more than 4,000 businesses across 15 countries in assessing their sustainability capacities and practices against triple-impact indicators, while also improving their access to government contracting opportunities.
In the Province of Mendoza, Argentina, for instance, suppliers participating in public procurement processes are required to provide information and supporting evidence on their sustainability practices. Their assessment through HAPS allows the government to measure their environmental, social, and economic performance, as well as their alignment with the SDGs. Rather than serving as a general eligibility requirement for all tenders, the results are used both to award points in the assessment of business sustainability and to provide the government with insight into the market’s capacity to meet sustainable procurement demand.
This broader market perspective is essential, as sustainable public demand can only be effective when supported by a supply base capable of meeting sustainability standards. By encouraging suppliers to improve their performance, this approach helps shape business behavior, strengthen sustainable markets, and translate government purchasing power into broader development outcomes.
As countries work to accelerate progress toward the SDGs, public procurement stands out as one of the most effective mechanisms for translating public resources and policy commitments into concrete action and public value. Demonstrating its contribution to citizens’ well-being requires moving beyond compliance toward a results-oriented approach. Because the way governments buy reflects the way they govern, transparent and accountable procurement can strengthen confidence that public funds are managed responsibly and in the public interest. By linking spending decisions to development outcomes, public procurement becomes a cornerstone of democratic governance and a catalyst for sustainable development, generating lasting value for society.
Editor’s Note: The opinions expressed here by the authors are their own, not those of impakter.com — In the Cover Photo: A fleet of electric buses in Bogotá, Colombia, Jan. 6, 2021. Cover Photo Credit: Wikimedia Commons.
