Understanding Home Bias in Procurement: Evidence from National and Subnational Governments

Manuel Jose Garcia Santana and Marta Santamaría

No 10311, Policy Research Working Paper Series from The World Bank

Abstract: Are governments locally biased when buying goods and services Can this home bias explain the low integration of procurement markets Using one million procurement contracts awarded in France and Spain, this paper explores whether the home bias follows the government's geographical scope: national governments have a national bias, while subnational governments have a local bias. The relative home bias across governments is estimated by comparing how local and non-local establishments sell the same product to national and subnational governments in the same destination. This paper finds that the governments’ home bias explains a big part of the high local concentration in procurement.

Date: 2023-02-21
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