Does the World Trade Organization Government Procurement Agreement Deliver What It Promises?

28 Pages Posted: 18 Mar 2017

See all articles by Bedri Kamil Onur Tas

Bedri Kamil Onur Tas

TOBB University of Economics and Technology - Department of Economics; Economic Research Forum (ERF)

Kamala Dawar

Sussex University School of Law

Peter Holmes

University of Sussex - Sussex European Institute; College of Europe, Bruges

Sübidey Togan

Bilkent University

Date Written: March 16, 2017

Abstract

The revised World Trade Organization (WTO) Government Procurement Agreement (GPA), which came into force on April 6, 2014, provides a limited number of WTO Members with a framework for ensuring that the tenders scheduled under the Appendix to WTO GPA are conducted in a competitive, non-discriminatory, and transparent manner satisfying the conditions on integrity. The purpose of this paper is to analyze empirically whether the WTO GPA is effective in promoting non-discriminant, open, transparent, competitive and efficient government procurement. To study this question, we make use of the micro-level data set released recently by the European Union (EU) covering more than 3 million tenders conducted in the European Economic Area (EEA), Switzerland and Macedonia during the years 2006-2015.

We have four major results. First, the likelihood that the contract is awarded to a foreign firm is significantly higher when the contract is covered by the WTO GPA. Second, number of bidders are significantly higher in WTO GPA covered procurements. Third, we find that corruption risk is lower in WTO GPA covered tenders. We use two measures to assess corruption risk: procurements that receive only one bid, and the connection strength of a winning firm in the network of suppliers. We find that single bid procurement is significantly lower in tenders covered by the WTO GPA. Additionally, we conclude that the WTO GPA provides the opportunity for less connected firms to win contracts. Finally, we find that the WTO GPA does not have a significant effect of procurement costs.

Keywords: Public Procurement, European Union, Competition

JEL Classification: D73, F53, L41, P35

Suggested Citation

Tas, Bedri Kamil Onur and Dawar, Kamala and Holmes, Peter Martin and Togan, Subidey, Does the World Trade Organization Government Procurement Agreement Deliver What It Promises? (March 16, 2017). Available at SSRN: https://ssrn.com/abstract=2934127 or http://dx.doi.org/10.2139/ssrn.2934127

Bedri Kamil Onur Tas (Contact Author)

TOBB University of Economics and Technology - Department of Economics ( email )

Sogutozu Cad. No:43 Sogutozu
Ankara, 06560
Turkey

HOME PAGE: http://onurtas.weebly.com

Economic Research Forum (ERF) ( email )

21 Al-Sad Al-Aaly St.
(P.O. Box: 12311)
Dokki, Cairo
Egypt

Kamala Dawar

Sussex University School of Law ( email )

Falmer
Brighton BN1 9QN
United Kingdom

Peter Martin Holmes

University of Sussex - Sussex European Institute ( email )

Falmer, Brighton BN1 9QN
United Kingdom

College of Europe, Bruges

Dijver 11
B-8000 Brugge, Oost Vlanderen 10000
Belgium

Subidey Togan

Bilkent University ( email )

Bilkent, Ankara 06533
Turkey

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