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Trade Barriers in Government Procurement

Author

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  • Mulabdic,Alen
  • Rotunno,Lorenzo

Abstract

This paper estimates trade barriers in government procurement, a market that accounts for 12 percent of world GDP. Using data from inter-country input-output tables in a gravity model, the paper finds 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

  • Mulabdic,Alen & Rotunno,Lorenzo, 2021. "Trade Barriers in Government Procurement," Policy Research Working Paper Series 9602, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9602
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    Cited by:

    1. Arozamena, Leandro & Ganuza, Juan-José & Weinschelbaum, Federico, 2023. "Renegotiation, discrimination and favoritism in symmetric procurement auctions," European Economic Review, Elsevier, vol. 159(C).
    2. 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).
    3. Matilde Bombardini & Andres Gonzalez-Lira, 2024. "The Increasing Cost of Buying American," CESifo Working Paper Series 11339, CESifo.
    4. 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.
    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. 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).
    7. 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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