Why do some governments allow foreign competition in public purchasing while others do not? By focusing on the dilemma that governments, both as market participant and market regulator, face, I propose several factors that lead governments to open up their public procurement market to international competition. A government is not an ordinary consumer like the individual consumer but a political agent that is constrained by the domestic political and economic conditions. In particular, I argue that a government's decision is affected by the level of political competition, political institutions, and the economic market structure. Empirically, I test the arguments both at sub-national and cross-national settings to provide additional robustness.; Throughout the dissertation, I highlight the problems that governments face in the procurement market which is different from other forms of trade barriers. Unlike in the case of tariff protection, a government faces different incentives due to the fact that the government itself is also a market participant as well as a market regulator. Not surprisingly, the findings suggest different and often opposite stories than those from the studies on the politics of tariffs. The conditions that are favorable to tariff reduction might not be so favorable in reducing non-tariff barriers. This might provide explanations to the current trends in which non-tariff barriers are on the increase while traditional barriers such as tariff are on the decrease.
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