Using International Institutions to Improve Public Procurement

The World Trade Organization's voluntary rules on government procurement are a useful mechanism for ensuring that public procurement procedures are efficient. They also provide an opportunity to reduce the uncertainty of participants by increasing transparency and accountability. Yet most developing countries have chosen not to subject their procurement policies to international disciplines and multilateral surveillance. Their reasons may include an unfamiliarity with the government procurement agreement (GPA); a perception that the potential payoffs are small; a desire to discriminate in favor of domestic firms; or the successful opposition of groups that benefit from the current regimes. Although the economic rationales for abstaining from the GPA are not compelling, a quid pro quo for accession may be needed to overcome opposition by special interests. Developing country procurement markets are large enough that governments may be able to make accession to the GPA conditional on temporary exceptions to multilateral disciplines or on better access to export markets. Copyright 1998 by Oxford University Press.