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Trade barriers in government procurement

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Abstract

This paper estimates trade barriers in government procurement, a market that accounts for 12% of world GDP. Using data from inter-country input-output tables in a gravity model, we find that home bias in government procurement is significantly higher than in trade between firms. However, this difference has been shrinking over time. Results also show that trade agreements with provisions on government procurement increase cross-border flows of services, whereas the effect on goods is small and not different from that in private markets. Provisions containing transparency and procedural requirements drive the liberalizing effect of trade agreements.

Suggested Citation

  • Alen Mulabdic & Lorenzo Rotunno, 2021. "Trade barriers in government procurement," AMSE Working Papers 2122, Aix-Marseille School of Economics, France.
  • Handle: RePEc:aim:wpaimx:2122
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    More about this item

    Keywords

    government procurement; trade agreements; gravity equation;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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