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Trade barriers in government procurement

Author

Listed:
  • Alen Mulabdic

    (WBG = GBM - World Bank Group = Groupe Banque Mondiale)

  • Lorenzo Rotunno

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

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," Post-Print halshs-03270070, HAL.
    • Handle: RePEc:hal:journl:halshs-03270070
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    Cited by:

    1. is not listed on IDEAS
    2. Matilde Bombardini & Andres Gonzalez-Lira, 2024. "The Increasing Cost of Buying American," CESifo Working Paper Series 11339, CESifo.
    3. Nannan Wang & Naixiao Cui & Junlin Hao & Yilin Chai, 2025. "The Role of Government Procurement in Sustainable Industry Development—The Trends and Research Agenda," Sustainability, MDPI, vol. 17(3), pages 1-23, February.
    4. Arozamena, Leandro & Ganuza, Juan-José & Weinschelbaum, Federico, 2023. "Renegotiation, discrimination and favoritism in symmetric procurement auctions," European Economic Review, Elsevier, vol. 159(C).
    5. Alen Mulabdic & Gaurav Nayyar, 2024. "Is the U.S. Friend-Shoring, Nearshoring, or Reshoring ? Evidence from Greenfield Investment Announcements," Policy Research Working Paper Series 11006, The World Bank.
    6. Li, Jidong & Yuan, Cheng & Huang, Zhichun, 2025. "Invest to win: A study of "Local bias jumping" in China," Journal of Economic Behavior & Organization, Elsevier, vol. 236(C).
    7. Heid, Benedikt & Stähler, Frank, 2024. "Structural gravity and the gains from trade under imperfect competition: Quantifying the effects of the European Single Market," Economic Modelling, Elsevier, vol. 131(C).
    8. Hang, Jing & Zhan, Chaoqun, 2023. "Government procurement and resource misallocation: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 568-589.

    More about this item

    Keywords

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    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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