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de Araújo, Ignácio Tavares
Year of Publication: 
Series/Report no.: 
Texto para Discussão 2450
Abstract (Translated): 
This study assesses possible costs and benefits resulting from Brazil's accession into the World Trade Organization's (WTO) Government Procurement Agreement (GPA). Initially, this evaluation is based on a bibliographical survey that analyses the effects of the non-discriminatory public procurement policies. An econometric analysis will be carried out to indicate how entry into the GPA can influence the government's use of imported goods and services. Finally, simulations of possible scenarios of GPA impacts in Brazil will be performed in a computable general equilibrium model. The literature points out that the main advantages of entering the GPA are access to the market of government purchases from other countries, increased transparency in procurement processes and consequent gains in efficiency in the public sector. There would certainly be costs related to adapting local laws to give equal treatment to foreign and domestic firms. There is also the fear that entry into the GPA can generate job losses due to the substitution of local suppliers by foreigners, although the theory on the subject does not predict this result clearly. The empirical study indicates that entry into the GPA is at least correlated with an increase in the share of imported government purchases. The general equilibrium analysis indicates that possible costs, in terms of loss of employment and welfare in the Brazilian economy, resulting from the entry into the GPA, could be offset by the increase in exports and by the possible efficiency gains of the public sector.
government procurement
Document Type: 
Working Paper

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