Is Green Public Procurement contagious? A dynamic approach to the heterogeneous adoption of green purchasing policies in Japanese municipalities

In contrast to its traditional aim of maximizing the product's intrinsic value for money, public procurement (i.e. the contracts by which public bodies purchase supplies, services, and works from private suppliers) is increasingly used as an instrument for environmental policies. However, compared to national governments, local governments, such as municipalities, face greater challenges to make their purchases more sustainable. There are also significant spatial discrepancies in the implementation of green public procurement by local governments. This paper tries to explain the spatial heterogeneity in the adoption of municipal green purchasing policies in Japan and raises the original issue of peer pressure and inter-municipal cooperation in the implementation of green public procurement, both from a theoretical and empirical perspective. We first show that small municipalities are less likely to adopt green purchasing policies, as they have less internal resources and are more costly to assist. The adoption of green purchasing policies can also stimulate the implementation of similar plans in surrounding municipalities through peer effects. By studying the purchasing strategies of Japanese municipalities between 2011 and 2020, we show that economic and environmental factors seem to be a more plausible explanation for spatial heterogeneity in the implementation of green public procurement than peer effects or cooperation. Therefore, the generalization of municipal green purchasing policies in Japan seems to require vertical support, especially in favor of small cities.