Competition Policy and International Trade Liberalisation: Essential Complements to Ensure Good Performance in Public Procurement Markets

2009 | Public Procurement Law Review 18 (2)

The performance of public procurement markets has major implications for the effectiveness of governance and the well-being of citizens, in both developed and developing countries. Public procurement accounts for a substantial proportion of gross domestic product—15–20 per cent on average in developed economies. Moreover, procurement often involves goods and services having particular economic, social and/or developmental significance—e.g. transportation and other physical infrastructure which is vital to the competitiveness of business users and the mobility of citizens; hospitals and other public health facilities; schools and universities; and defence and policing. The economic and social significance of public procurement will only increase with the current macroeconomic downturn and the emphasis that is being placed on public infrastructure spending as an element of recovery strategies around the world. The efficacy and transparency of public procurement processes also impact directly on the overall credibility of government and, hence, on citizens’ level of trust, a factor which has important implications for the propensity to invest and engage in other wealth-creating activities.

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