A Contest Model of Liberalizing Government Procurements
This paper models government procurements as a contest among domestic firms, and - in case of liberalization - domestic and foreign firms. Liberalizing procurements reduces wasteful domestic lobbying but also increases the likelihood that a foreign firm will capture the rent. We show that the domestic welfare change is not monotonic in the foreign firmsÕ abilities. Domestic welfare increases only if the gross surplus generated by foreign firms is sufficiently large. Furthermore, we show that, from the global welfare point of view, domestically optimal liberalization policies can be either excessive or too restrictive.
|Date of creation:||Jan 2008|
|Date of revision:||Jan 2008|
|Contact details of provider:|| Postal: |
Phone: +64 3 479 8725
Fax: 64 3 479 8171
Web page: http://www.business.otago.ac.nz/econ
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- James A. Brander & Barbara J. Spencer, 1981.
"Tariffs and the Extraction of Foreign Monopoly Rents under Potential Entry,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 14(3), pages 371-89, August.
- James A. Brander & Barbara J. Spencer, 1980. "Tariffs and the Extraction of Foreign Monopoly Rents under Potential Entry," Working Papers 414, Queen's University, Department of Economics.
- Federico Trionfetti, 2000. "Discriminatory Public Procurement and International Trade," The World Economy, Wiley Blackwell, vol. 23(1), pages 57-76, 01.
- Auriol, E., 1998.
"Corruption in Procurement and Public Purchase,"
98a29, Universite Aix-Marseille III.
- Vagstad, Steinar, 1995. "Promoting fair competition in public procurement," Journal of Public Economics, Elsevier, vol. 58(2), pages 283-307, October.
- McAfee, R. Preston & McMillan, John, 1989. "Government procurement and international trade," Journal of International Economics, Elsevier, vol. 26(3-4), pages 291-308, May.
- Mougeot, Michel & Naegelen, Florence, 2005. "A political economy analysis of preferential public procurement policies," European Journal of Political Economy, Elsevier, vol. 21(2), pages 483-501, June.
- Nti, Kofi O, 1999. " Rent-Seeking with Asymmetric Valuations," Public Choice, Springer, vol. 98(3-4), pages 415-30, March.
- Richard Cornes & Roger Hartley, 2005.
"Asymmetric contests with general technologies,"
Springer, vol. 26(4), pages 923-946, November.
- 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.
- Evenett, Simon J. & Hoekman, Bernard M., 2004. "Government procurement : Market access, transparency, and multilateral trade rules," Policy Research Working Paper Series 3195, The World Bank.
- Evenett, Simon J & Hoekman, Bernard, 2003. "Government Procurement: Market Access, Transparency, and Multilateral Trade Rules," CEPR Discussion Papers 4109, C.E.P.R. Discussion Papers.
- Stein, William E, 2002. " Asymmetric Rent-Seeking with More Than Two Contestants," Public Choice, Springer, vol. 113(3-4), pages 325-36, December.
- Branco, Fernando, 1994. "Favoring domestic firms in procurement contracts," Journal of International Economics, Elsevier, vol. 37(1-2), pages 65-80, August.
- Nitzan, Shmuel, 1994. "Modelling rent-seeking contests," European Journal of Political Economy, Elsevier, vol. 10(1), pages 41-60, May.
When requesting a correction, please mention this item's handle: RePEc:otg:wpaper:0803. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Janet Bryant)
If references are entirely missing, you can add them using this form.