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GTAP Resource #4756

"Public procurement data base extension and modelling modifications for analysis purposes"
by Aguiar, Angel, Caitlyn Carrico, Thomas Hertel, Zekarias Hussein and Robert McDougall

Government consumption makes up a significant part of national economies, 6-26% of gross domestic product (GDP). In addition, government procurement affects a substantial volume of world trade flows, amounting to $1300 billion per year. Given the size and the potential implications for trade, employment and prices, government procurement has become increasingly prominent in the multilateral negotiations starting with the 1978 Tokyo Round of GATT and leading up to the ratification of the WTO-Government Procurement Agreement (GPA) in 1996.
Despite its importance in the overall trade reform picture, the analytical tools used to quantify the economic impact of discriminatory government procurement remain underdeveloped. The objective of this study is to improve data and modelling representation of government procurement for analysis purposes.
Government procurement agreements involve multiple countries purchasing a wide range of goods and services supplied by many different regions. Therefore the effect of these agreements is best addressed in a multi-region, general equilibrium framework. Since most contemporary, global CGE models are based on the GTAP Data Base (Narayanan, Aguiar and McDougall, 2012), we have taken this framework as the starting point for our analysis.
In terms of data developments, government investment is now distinguished for the 57 GTAP Commodities. In order to determine the origin of imports by end use, we use economic concordances, replicating the approach taken in the recent MRIO literature.
The modified model adds a new nest to the production structure that would allow for different procurement regimes in a model that incorporates the origin of imports by agents’ end use (i.e., for firms, private consumption, government consumption, and investment). We illustrate this framework by simulating the impact of local preference reduction in one of the newly introduced procurement regimes.

Resource Details (Export Citation) GTAP Keywords
Category: 2015 Conference Paper
Status: Published
By/In: Presented at the 18th Annual Conference on Global Economic Analysis, Melbourne, Australia
Date: 2015
Created: Aguiar, A. (4/15/2015)
Updated: Aguiar, A. (4/15/2015)
Visits: 2,736
- The GTAP Data Base and extensions

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