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Trade Barriers in Government Procurement (English)

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.

Details

  • Author

    Mulabdic,Alen, Rotunno,Lorenzo

  • Document Date

    2021/03/25

  • Document Type

    Policy Research Working Paper

  • Report Number

    WPS9602

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    World,

  • Region

    The World Region,

  • Disclosure Date

    2021/03/25

  • Disclosure Status

    Disclosed

  • Doc Name

    Trade Barriers in Government Procurement

  • Keywords

    trade and investment; domestic input-output tables; private market; gravity equation; membership in the wto; gravity model; determinants of trade; transfer to consumer; optimal allocation of resources; development research group; Research Support; bilateral trade; general equilibrium model; income and expenditure; trade costs; public procurement market; changes in trade; general government expenditure; pattern of expenditures; value of imports; shipment of good; data on income; free trade agreement; measure of trade; procurement of service; pattern of trade; general equilibrium analysis; unilateral trade policy; collected data; impact of trade; trade in goods; purchase of service; allocation of income; protectionist trade policy; elasticity of substitution; supply of good; pattern of specialization; trade policy variables; European Economic Area; country of origin; product market regulation; common legal origin; information and statistics; procurement contract; import penetration; internal trade; public market; public authority; International Trade; public expenditure; intermediate input; gravity framework; procurement for purchase; public entity; private good; Trade Policies; national account; public good; factory gate; capital formation; monopolistic competition; overall expenditure; national border; price index; consistent estimate; expenditure share; public purchase; empirical estimate; measurement error; private expenditure; supply side; raw data; central tendency; government contract; protectionist measure; discriminatory measures; market access; market producer; social transfer; comparative advantage; government entity; federal procurement; government purchase; trade statistic; intermediate consumption; federal level; recent work; empirical model; empirical application; national product; perfect competition; partial equilibrium; trade datum; anecdotal evidence; theoretical model; variable cost; Public Goods; imperfect information; increasing return; demand function; aggregate data; procurement auction; price preference; aggregate trade; optimal taxation; aggregate expenditure; source country; gravity estimates; land transport; empirical evidence; land transportation; local enterprise; household expenditure; foreign providers; solid line; ongoing work; econometric analysis; empirical analysis; empirical result; primary sector; robustness check; procedural matter; development policy; open access; local sale; international sale; liberalizing effect; procedural requirement; foreign bidder; cross-border flow; cross border flow; common language; legal language; legal system; foster transparency; world income; average trade; domestic shipment; panel regression; expenditure term; legal procedure; factor price; time t; economic integration; national treatment; trade friction; sectoral expenditure; signatory countries; telecommunication service; new roads; domestic price; local content; tender process; it services; import share; estimation procedure; international input; international transaction

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Citation

Mulabdic,Alen Rotunno,Lorenzo

Trade Barriers in Government Procurement (English). Policy Research working paper,no. WPS 9602 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/909421616692457601/Trade-Barriers-in-Government-Procurement