Local Politics and International Agreement: The Case of Government Procurement in the U.S. States

Abstract

This article examines the responses of sub-national governments to international agreements that severely reduce their policy discretion. I focus on their decision to subject public procurement to international competition by joining the Agreement of Government Procurement (GPA) of the World Trade Organization. In a public procurement market, a government becomes both a market participant and a market regulator. I argue that the propensity of governments to join the GPA, thus reducing their discretion as market regulators, depends on the degree of local political competition. Studying state governments in the United States, I find that the degree of political competition positively affects not only the propensity to join the GPA but also the amount of procurement that a government subjects to international competition.