Protecting Tropical Forests through Public Procurement of Emission Reductions

The rate of destruction of tropical forests continues to accelerate at an alarming rate contributing to an important fraction of overall greenhouse gas emissions. In recent years, much hope has been vested in the emerging REDD+ framework under the UN Framework Convention on Climate Change (UNFCCC), which aims at creating an international incentive system to reduce emissions from deforestation and forest degradation. This paper argues that in the absence of an international consensus on the design of results-based payments, “bottom-up” initiatives should take the lead and explore new avenues. It suggests that a call for tender for REDD+ credits might both assist in leveraging private investments and spending scarce public funds in a cost-efficient manner. The paper discusses the pros and cons of results-based approaches, provides an overview of the goals and principles that govern public procurement and discusses their relevance for the purchase of REDD+ credits, in particular within the ambit of the European Union.

Book Review: Regulating Code : Good Governance and Better Regulation in the Information Age

Digital technologies have profoundly changed not only the ways we create, distribute, access, use and re-use information but also many of the governance structures we had in place. Overall, "older" institutions at all governance levels have grappled and often failed to master the multi-faceted and multi-directional issues of the Internet. Regulatory entrepreneurs have yet to discover and fully mobilize the potential of digital technologies as an influential factor impacting upon the regulability of the environment and as a potential regulatory tool in themselves. At the same time, we have seen a deterioration of some public spaces and lower prioritization of public objectives, when strong private commercial interests are at play, such as most tellingly in the field of copyright. Less tangibly, private ordering has taken hold and captured through contracts spaces, previously regulated by public law. Code embedded in technology often replaces law. Non-state action has in general proliferated and put serious pressure upon conventional state-centered, command-and-control models. Under the conditions of this "messy" governance, the provision of key public goods, such as freedom of information, has been made difficult or is indeed jeopardized.The grand question is how can we navigate this complex multi-actor, multi-issue space and secure the attainment of fundamental public interest objectives. This is also the question that Ian Brown and Chris Marsden seek to answer with their book, Regulating Code, as recently published under the "Information Revolution and Global Politics" series of MIT Press. This book review critically assesses the bold effort by Brown and Marsden.

Inseparable, incapable, or invisible: Why public organizations award no-bid contracts

No-bid contracting is a highly prevalent practice in public procurement of technology services. Alt-hough no-bid contracting is a substantial problem since it reduces competition and welfare, the litera-ture lacks theoretical explanations and empirical tests for why public organizations award no-bid con-tracts. In this paper, we propose three theoretical explanations for no-bid contracting, drawing on transaction cost economics, organizational learning, and institutional theory. We also present how we test these explanations using a comprehensive sample of public procurement transactions. We expect to contribute theoretical explanations for no-bid contracting and practical implications for policy-makers.

Exploring foreign market access in government procurement

Using unexplored Japanese and Swiss public procurement data over 1990-2003, we examine the effect of macroeconomic, political economy, procurement-specific and domestic policy factors on governments’ sourcing decisions. We also provide for an empirical test of Baldwin's (1970, 1984) "neutrality proposition" and for the effectiveness of the WTO's Uruguay Round Agreement on Government Procurement (URGPA) in increasing foreign market access. Our results suggest the importance of the magnitude of procurement demand, domestic firm attributes and unobserved sector-specific heterogeneity in these governments' purchases from abroad. However, the expected impact of traditional macroeconomic variables and political budget cycles does not come through in our results. Public and private sector imports do not offset each other in our analyses for Japan and only selectively for Switzerland. Finally, membership of the GPA is only found to increase the value of foreign procurement in Switzerland, though it seems to increase the import demand for contracts in both countries.

Legal Aspects of Sino-­African Tied Aid: The Art of Playing with a Legal Grey Area

Sino-African trade has seen a fifty-fold increase in the years 1999 to 2008. In some African regions, particularly in sub-Saharan Africa, China has even replaced the US as the most important trading partner today. But China holds not a single FTA on the African continent, while other major trading partners of African economies rely on an extensive framework of different trade agreements. What is, thus, the legal basis of the recent increase of Sino-African trade? Interestingly, Sino-African trade has seen a particularly strong increase in countries that have entered into tied aid agreements with China. These agreements are commonly known under the term ‘Angola-Model’ and consist of a multifaceted network of barter-trading-systems, aspects of tied aid and concessions for oil and other commodities linked with a state loan. It is likely that these agreements have an impact on the trade-flows between African countries and China. This paper discusses the legal character of this new form of economic cooperation, or modern version of tied aid. Critical legal aspects related to this form of tied aid refer to violation of the principle of most-favoured nation (MFN), illegitimate export subsidies, market access, public procurement and transparency in the international trading system. However, despite the recent outcry of the foremost Western community against the strategy of the Chinese government on the African continent, the practice of the Angola-Model based tied aid is not entirely new, and neither is it against the law. The case of tied aid is situated in a legal grey area that should be examined thoroughly in order to strengthen the international trading system and to support developing countries in their attempt to gain from tied aid arrangements.

Estimating market access in non-GPA countries: A suggested methodology

The WTO’s Agreement on Government Procurement (GPA) has data reporting obligations for all its Contracting Parties. Submitting such data promotes transparency in public procurement and also signals tendencies towards discrimination. However, most developing countries, especially emerging economies, are non-members of the GPA and therefore have no comparable data reporting obligations. In most cases, this has led to an absence of any reliable data on these countries’ public purchases, which poses a serious challenge in international negotiations on the subject and in examining the impact of protectionist measures in these countries’ public markets. In this short paper, we attempt to overcome these data challenges by developing a methodology to estimate the size of procurement markets in non-GPA countries as well as foreign market access therein. We also show the results from this methodology for estimating the EU’s access in select emerging economies’ public markets.