infonet-economy

This paper examines the effects on national welfare and market access of two public procurement practices, discrimination and nontransparency. Both policies have become prominent in international trade negotiations, including the Doha Round of World Trade Organization (WTO) trade talks. We show that fostering either domestic competition or transparency in state contracting tends to improve welfare. In contrast, we find 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.