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Are Discriminatory Procurement Policies Motivated by Protectionism?

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  • Albert Breton
  • Pierre Salmon

Abstract

When purchasing goods and services, governments often discriminate in favour of domestic suppliers. It is widely assumed that such behaviour 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.
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  • Albert Breton & Pierre Salmon, 1996. "Are Discriminatory Procurement Policies Motivated by Protectionism?," Kyklos, Wiley Blackwell, vol. 49(1), pages 47-68, February.
    • Handle: RePEc:bla:kyklos:v:49:y:1996:i:1:p:47-68
    DOI: 10.1111/j.1467-6435.1996.tb01384.x
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    Cited by:

    1. Tania Ghossein & Bernard Hoekman & Anirudh Shingal, 2021. "Public Procurement, Regional Integration, and the Belt and Road Initiative [How China Got Sri Lanka to Cough Up a Port]," The World Bank Research Observer, World Bank, vol. 36(2), pages 131-163.
    2. Dimitri Mardas, 1999. "Tendering procedures and buy-national policies," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 5(2), pages 189-203, May.
    3. 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.
    4. Shingal, Anirudh, 2011. "Services procurement under the WTO's Agreement on Government Procurement: whither market access?," World Trade Review, Cambridge University Press, vol. 10(4), pages 527-549, October.
    5. Chiara Carboni & Elisabetta Iossa & Gianpiero Mattera, 2017. "Barriers to Public Procurement: A Review and Recent Patterns in the EU," IEFE Working Papers 92, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    6. repec:idb:brikps:7123 is not listed on IDEAS
    7. Anirudh Shingal, 2015. "Econometric Analyses of Home Bias in Government Procurement," Review of International Economics, Wiley Blackwell, vol. 23(1), pages 188-219, February.
    8. 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.
    9. Dimitri Mardas, 2010. "Stabilization and Association Agreements (SAAs), Europe Agreements, and Public Procurement," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 38(3), pages 331-343, September.
    10. Bernard Hoekman, 2015. "International Cooperation on Public Procurement Regulation," RSCAS Working Papers 2015/88, European University Institute.
    11. Shingal, ANIRUDH, 2011. "Foreign market access in government procurement," MPRA Paper 32814, University Library of Munich, Germany.
    12. Andrea, Bastianin & Chiara F., Del Bo, 2019. "Procurement in Big Science Centres: politics or technology? Evidence from CERN," Working Papers 410, University of Milano-Bicocca, Department of Economics, revised 21 May 2019.
    13. Chiara Carboni & Elisabetta Iossa & Gianpiero Mattera, 2018. "Barriers towards foreign firms in international public procurement markets: a review," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(1), pages 85-107, March.
    14. Michele Santoni, 2002. "Discriminatory Procurement Policy with Cash Limits," Open Economies Review, Springer, vol. 13(1), pages 27-45, January.
    15. Sanfilippo, Marco, 2018. "Firm performance and participation in public procurement: Evidence from Sub-Saharan Africa," CEPR Discussion Papers 12752, C.E.P.R. Discussion Papers.
    16. MILE 02, Anirudh Shingal, 2012. "Exploring foreign market access in government procurement," Papers 305, World Trade Institute.
    17. Carlos Pimenta & Mario Pessoa & Marco Varea & Adriana Arosteguiberry & Mike Williams & Israel Fainboim Yaker & Claudiano de Albuquerque & José Adrián Vargas & Joseph Cavanagh & Benito Almudena Fernánd, 2015. "Public Financial Management in Latin America: The Key to Efficiency and Transparency," IDB Publications (Books), Inter-American Development Bank, number 90517 edited by Carlos Pimenta & Mario Pessoa, February.
    18. Pimenta, Carlos & Pessoa, Mario & Varea, Marco & Arosteguiberry, Adriana & Williams, Mike & Fainboim Yaker, Israel & De Albuquerque, Claudiano & Vargas, José Adrián & Cavanagh, Joseph & Fernández Beni, 2015. "Public Financial Management in Latin America: The Key to Efficiency and Transparency," IDB Publications (Books), Inter-American Development Bank, number 7123, March.
    19. Hoekman, Bernard, 1998. "Using International Institutions to Improve Public Procurement," The World Bank Research Observer, World Bank, vol. 13(2), pages 249-269, August.
    20. Bernard Hoekman & Marco Sanfilippo, 2020. "Foreign participation in public procurement and firm performance: evidence from sub-Saharan Africa," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(1), pages 41-73, February.
    21. Dengler, Benedikt, 2018. "The WTO Government Procurement Agreement as a Commitment Device: A First Appraisal," CEPR Discussion Papers 13266, C.E.P.R. Discussion Papers.

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