n Law, Democracy & Development - The amended Government Procurement Agreement : challenges and opportunities for South Africa

Volume 18, Issue 1
  • ISSN : 1028-1053
  • E-ISSN: 2077-4907



General government procurement (including for defence) accounts for 20 per cent and 15 per cent of Gross Domestic Product (GDP) of Organisation for Economic Co-operation and Development (OECD) and non-OECD countries, respectively. Despite liberalisation of trade under the General Agreement on Tariffs and Trade (GATT) and the World Trade Organisation (WTO), government procurement largely continues to have high levels of home-bias. This is primarily so because a multiplicity of objectives drive government procurement. Considerations of government procurement as a policy instrument very often override cost-effectiveness as the primary consideration in determining it. For example, government procurement is commonly used as a policy tool for developing target sections of populations, industry, regions etc. In addition, according to Keynesian arguments, government procurement is the key instrument for fiscal policy intervention to kick-start a slowing economy. These multiple objectives create complexity because there are usually trade-offs involved between them in that attaining one is usually at the cost of the another.

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