Title: The impact of public procurement on foreign trade: the case of Estonia

Authors: Kaarel Kilvits, Alari Purju

Addresses: Faculty of Economics and Business Administration, Tallinn University of Technology, 101 Kopli, Tallinn 11712, Estonia. ' Department of Economics, Estonian Business School, 3 Lauteri, Tallinn 10114, Estonia

Abstract: This article analyses the impact of public procurement policies on the foreign trade of Estonia. The trade regime of Estonia was already very liberal before it joined the EU in 2004. However, academic research has not examined whether discriminating public procurement was used as a Nontariff Barrier (NTB) in Estonia prior to accession. The task of the current analysis is to evaluate the possible impact of public procurement policy on trade patterns. Two series of indicators are used for this purpose. The first series characterises the impact of public sector purchases on domestic production and the imports of different industries. When the results suggest that the sector is highly dependent on public procurement, we consider a second set of indicators. The second series shows the position of different industries in international and domestic competition. The findings of this paper suggest that public procurement was not used as a NTB by Estonia in the 1990s.

Keywords: Estonia; European Union; EU; foreign trade; nontariff barriers; NTB; protectionism; public procurement; public policy.

DOI: 10.1504/IJPP.2009.021552

International Journal of Public Policy, 2009 Vol.4 No.1/2, pp.159 - 177

Published online: 30 Nov 2008 *

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