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Are Discriminatory Procurement Policies Motivated by Protectionism?

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  • Breton, Albert
  • Salmon, Pierre

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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Bibliographic Info

Article provided by Wiley Blackwell 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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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0023-5962

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Web: http://www.blackwellpublishing.com/subs.asp?ref=0023-5962

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Cited by:
  1. Dimitri Mardas, 2010. "Stabilization and Association Agreements (SAAs), Europe Agreements, and Public Procurement," Atlantic Economic Journal, International Atlantic Economic Society, vol. 38(3), pages 331-343, September.
  2. 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.
  3. Hoekman, Bernard, 1998. "Using International Institutions to Improve Public Procurement," World Bank Research Observer, World Bank Group, vol. 13(2), pages 249-69, August.
  4. Shingal, Anirudh, 2010. "Services procurement under the WTO’s agreement on government procurement: whither market access?," MPRA Paper 32881, University Library of Munich, Germany, revised 18 Jul 2011.
  5. Shingal, ANIRUDH, 2011. "Foreign market access in government procurement," MPRA Paper 32814, University Library of Munich, Germany.
  6. Michele Santoni, 2002. "Discriminatory Procurement Policy with Cash Limits," Open Economies Review, Springer, vol. 13(1), pages 27-45, January.
  7. Naegelen, Florence & Mougeot, Michel, 1998. "Discriminatory public procurement policy and cost reduction incentives," Journal of Public Economics, Elsevier, vol. 67(3), pages 349-367, March.

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