Are Discriminatory Procurement Policies Motivated by Protectionism?

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Are Discriminatory Procurement Policies Motivated by Protectionism?

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Breton, Albert
Salmon, Pierre

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Abstract

When purchasing goods and services, governments often discriminate in favor of domestic suppliers. It is widely assumed that such behavior is motivated by protectionism. Although this interpretation is sometimes valid, it is also puzzling. After reviewing some of the puzzles, the paper proposes an alternative explanation of preferential procurement based on the assumption that governmental buyers want to purchase goods and services at minimum cost but must do this in a context in which, because of the presence of unverifiable services, contracts are necessarily incomplete. The paper argues that preferential purchasing can guarantee the efficient delivery of these unverifiable services. Copyright 1996 by WWZ and Helbing & Lichtenhahn Verlag AG

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Article provided by Blackwell Publishing in its journal Kyklos.

Volume (Year): 49 (1996)
Issue (Month): 1 ()
Pages: 47-68
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Handle: RePEc:bla:kyklos:v:49:y:1996:i:1:p:47-68

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Evenett, Simon J & Hoekman, Bernard, 2003. "Government Procurement: Market Access, Transparency, and Multilateral Trade Rules," CEPR Discussion Papers 4109, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
- Evenett, Simon J. & Hoekman, Bernard M., 2004. "Government procurement : Market access, transparency, and multilateral trade rules," Policy Research Working Paper Series 3195, The World Bank. [Downloadable!]
- Evenett, Simon J. & Hoekman, Bernard M., 2005. "Government procurement: market access, transparency, and multilateral trade rules," European Journal of Political Economy, Elsevier, vol. 21(1), pages 163-183, March. [Downloadable!] (restricted)
Michele Santoni, 2002. "Discriminatory Procurement Policy with Cash Limits," Open Economies Review, Springer, vol. 13(1), pages 27-45, January. [Downloadable!] (restricted)
Hoekman, Bernard, 1998. "Using International Institutions to Improve Public Procurement," World Bank Research Observer, Oxford University Press, vol. 13(2), pages 249-69, August. [Downloadable!]

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