Government Procurement : Market Access, Transparency, and Multilateral Trade Rules

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.

Bibliographic Details

Main Authors:	Evenett, Simon J., Hoekman, Bernard M.
Language:	en_US
Published:	World Bank, Washington, DC 2004-01
Subjects:	access to markets, alternative instruments, arbitrage, asymmetric information, average costs, average prices, average variable costs, barriers to entry, bidding, border trade, budget constraints, competition laws, competition policies, competitive market, competitive markets, consumer surplus, consumers, cost functions, domestic competition, domestic demand, domestic industry, domestic market, domestic production, domestic suppliers, economic objectives, economic welfare, empirical studies, equilibrium, equilibrium prices, excess supply, exporters, factor prices, factors of production, foreign competition, foreign direct investment, foreign direct investments, foreign firm, foreign firms, foreign goods, foreign market, foreign producers, foreign products, foreign suppliers, Foreign Trade, Free Trade, Free Trade Area, GDP, geographic proximity, government expenditures, imperfect competition, import tariffs, imports, industrial policy, international trade, irreversibility, legislation, local authorities, marginal cost, marginal costs, Market access, market power, market segmentation, multilateral agreement, multilateral disciplines, multilateral trade, national markets, net imports, open economies, perfect competition, perfect substitutes, price elasticity, price elasticity of demand, producers, production costs, quotas, resource allocation, sales, services markets, substitutes, suppliers, supply curve, taxation, terms of trade, total costs, total sales, tradable goods, trade agreement, trade agreements, Trade Barriers, trade negotiations, trade policy, trade reform, trade reforms, trade restrictions, transparency, Uruguay Round, wages, welfare effects, welfare gains, world markets, world prices, World Trade, World Trade Organization, WTO, zero profits, Corruption, Government procurement, Transparency, Discriminatory trade practices, Trade agreements,
Online Access:	http://hdl.handle.net/10986/15762
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