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Trade barriers in government procurement

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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, we find that home bias in government procurement is significantly higher than in trade between firms. However, this difference has decreased 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 on transparency and procedural requirements are particularly instrumental in increasing cross-border government procurement.

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  • Mulabdic, Alen & Rotunno, Lorenzo, 2022. "Trade barriers in government procurement," European Economic Review, Elsevier, vol. 148(C).
    • Handle: RePEc:eee:eecrev:v:148:y:2022:i:c:s0014292122001180
    DOI: 10.1016/j.euroecorev.2022.104204
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    3. Matilde Bombardini & Andres Gonzalez-Lira, 2024. "The Increasing Cost of Buying American," CESifo Working Paper Series 11339, CESifo.
    4. 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.

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    More about this item

    Keywords

    Government procurement; Trade agreements; Gravity equation;
    All these keywords.

    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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