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Government procurement : Market access, transparency, and multilateral trade rules

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  • Evenett, Simon J.
  • Hoekman, Bernard M.

Abstract

The authors examine the effects on national welfare and market access of two public procurement practices-discrimination against foreign suppliers of goods and services and nontransparency of the procedures used to allocate government contracts to firms. Both types of policies have become prominent in international trade negotiations, including the Doha Round of the World Trade Organization (WTO) trade talks. Traditionally, the focus of international trade agreements has been on market access. However, many developing countries have opposed the launch of negotiations to extend the principle of nondiscrimination to procurement. As a result, the current focus in the Doha Round is on an effort to launch discussions on agreeing to principles of transparency in procurement. While transparency will not constrain the ability of governments to discriminate in favor of domestic firms, it could nonetheless improve market access by reducing corruption. The authors assess and compare the impact of eliminating discrimination and fostering greater domestic competition in procurement markets and enhancing transparency in state contracting. Their analysis concludes that greater domestic competition on procurement markets and greater transparency will improve economic welfare. But there is no clear-cut effect on market access of ending discrimination or improving transparency. This mismatch between market access and welfare effects may account for the slower progress in negotiating procurement disciplines in trade agreements than for traditional border measures such as tariffs, given that market access is the driving force behind trade agreements.

Suggested Citation

  • 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.
  • Handle: RePEc:wbk:wbrwps:3195
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    References listed on IDEAS

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    Cited by:

    1. Zornitsa Kutlina-Dimitrova & Csilla Lakatos, 2016. "Determinants of direct cross-border public procurement in EU Member States," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(3), pages 501-528, August.
    2. Evenett, Simon J & Hoekman, Bernard, 2004. "International Cooperation and the Reform of Public Procurement Policies," CEPR Discussion Papers 4663, C.E.P.R. Discussion Papers.
    3. Anirudh Shingal, 2015. "Econometric Analyses of Home Bias in Government Procurement," Review of International Economics, Wiley Blackwell, vol. 23(1), pages 188-219, February.
    4. Hansson Lisa, 2012. "The Private Whistleblower: Defining a New Role in the Public Procurement System," Business and Politics, De Gruyter, vol. 14(2), pages 1-28, August.
    5. Bucciol, Alessandro & Chillemi, Ottorino & Palazzi, Giacomo, 2013. "Cost overrun and auction format in small size public works," European Journal of Political Economy, Elsevier, vol. 30(C), pages 35-42.
    6. 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.
    7. Hejing Chen & John Whalley, 2011. "The WTO Government Procurement Agreement and Its Impacts on Trade," NBER Working Papers 17365, National Bureau of Economic Research, Inc.
    8. Sun, Francis, 2016. "How to manage client entertainment in China," Business Horizons, Elsevier, vol. 59(4), pages 401-410.
    9. Long, Ngo Van & Stähler, Frank, 2009. "A contest model of liberalizing government procurements," European Journal of Political Economy, Elsevier, vol. 25(4), pages 479-488, December.
    10. repec:eee:inecon:v:106:y:2017:i:c:p:134-142 is not listed on IDEAS
    11. Wilfred J. Ethier & Arye L. Hillman, 2017. "The Politics of International Trade," CESifo Working Paper Series 6456, CESifo Group Munich.
    12. Anna Balsevich & Svetlana Pivovarova & Elena Podkolzina, 2011. "Information Transparency in Public Procurement: How it Works in Russian Regions," HSE Working papers WP BRP 01/EC/2011, National Research University Higher School of Economics.
    13. Kutlina-Dimitrova, Zornitsa, 2017. "Can we put a price on extending the scope of the GPA? First quantitative assessment," DG TRADE Chief Economist Notes 2017-1, Directorate General for Trade, European Commission.
    14. Evenett, Simon J. & Shingal, Anirudh, 2016. "Gauging Procurement Policy Change During the Crisis-Era: Evidence from the Global Trade Alert," Papers 1015, World Trade Institute.
    15. repec:eee:ecosys:v:41:y:2017:i:1:p:52-67 is not listed on IDEAS
    16. Robert D. Anderson & Anna Caroline Müller, and Philippe Pelletier, 2015. "Regional Trade Agreements & Procurement Rules: Facilitators or Hindrances?," RSCAS Working Papers 2015/81, European University Institute.
    17. Rod Falvey & Annamaria La Chimia & Oliver Morrissey & Evious Zgovu, "undated". "Competition Policy and Public Procurement in Developing Countries," Discussion Papers 08/07, University of Nottingham, CREDIT.
    18. Shingal, Anirudh, 2013. ""New" econometric evidence for the Baldwin-Richardson (1972)/Miyagiwa (1991) theoretical predictions in government procurement," MPRA Paper 49138, University Library of Munich, Germany.
    19. Kirkpatrick, Colin & Raihan, Selim & Bleser, Adam & Prud'homme, Dan & Mayrand, Karel & Morin, Jean Frederic & Pollitt, Hector & Hinojosa, Leonith & Williams, Michael, 2011. "Trade sustainability impact assessment (SIA) on the comprehensive economic and trade agreement (CETA) between the EU and Canada: Final report," MPRA Paper 28812, University Library of Munich, Germany.
    20. Cole, Matthew T. & Davies, Ronald B. & Kaplan, Todd, 2017. "Protection in government procurement auctions," Journal of International Economics, Elsevier, vol. 106(C), pages 134-142.
    21. Bernard Hoekman, 2015. "International Cooperation on Public Procurement Regulation," RSCAS Working Papers 2015/88, European University Institute.
    22. Sangeeta Khorana & Anand Asthana, 2014. "EU FTA negotiations with India: The question of liberalisation of public procurement," Asia Europe Journal, Springer, vol. 12(3), pages 251-263, September.
    23. Shingal, Anirudh, 2012. "Exploring foreign market access in government procurement," Papers 305, World Trade Institute.

    More about this item

    Keywords

    Economic Theory&Research; Environmental Economics&Policies; Markets and Market Access; Decentralization; Labor Policies; Economic Theory&Research; Environmental Economics&Policies; Markets and Market Access; Access to Markets; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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