Edited by William A. Kerr and James D. Gaisford
Chapter 29: Government Procurement
Linda M. Young Introduction The sheer size of government procurement elevates interest in the economic eﬃciency and the domestic and international welfare consequences of how governments purchase goods and services. Government procurement accounts for nearly 20 percent of GDP in some countries, and all levels of government, including national, subnational and municipal governments are large purchasers of goods, services and construction services. Scrutiny over government procurement used to be exercised largely on the domestic level, with concern about policies favoring domestic suppliers over foreign ones, and the eﬀectiveness government procurement to achieve social goals. Finally, there is perpetual concern over the possibility of corruption inﬂuencing the award of government contracts. Domestic governments continue to reform and improve their government procurement systems to reduce costs and raise standards of eﬃciency, transparency and competition. Attention devoted to government procurement has heightened on the international level. Multilateral institutions, such as the World Bank, have increased eﬀorts to assist developing countries to improve their government procurement systems as part of a larger endeavor to improve governance. Some transition economies are challenged to meet standards for their government procurement systems in order to join the European Union (EU). The World Trade Organization (WTO) is working on an agreement to create standards for transparency in government procurement, an initial stage to move toward a comprehensive multilateral agreement to open government procurement to international trade from the current limited, plurilateral agreement. This chapter will discuss eﬀorts to improve government procurement systems...
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