The hidden cost of buying local: Public procurement and job creation

Public procurement, government spending on goods, services, and infrastructure, accounts for roughly 10–15% of GDP in most advanced economies and represents one of the most powerful levers of industrial policy available to governments. Many countries have adopted domestic content requirements and 'buy local' preferences in their procurement rules, from the Buy American Act in the United States to Local Jobs First programs in Australia and equivalent schemes across Europe. This lecture reviews the economic evidence on the consequences of such policies for employment, wages, and taxpayer costs. The findings raise important questions about whether procurement is an efficient tool for job creation and industrial policy.

About the speaker

Professor Matilde Bombardini holds the Oliver E. and Dolores Williamson Chair in the Economics of Organization and is a professor of Business and Public Policy at the Haas School of Business, UC Berkeley. She is also a Fellow in the Institutions, Organizations and Growth Program, a Research Associate at the National Bureau of Economic Research (NBER) and the Centre for Economic Policy Research (CEPR), and Co-Editor of the Journal of International Economics. She obtained her PhD from the Massachusetts Institute of Technology in 2005.

Her research focuses on the organisation of interest groups, lobbying, and the link between corporate philanthropy and firms’ political engagement. Her work in international trade has focused on the links between a country’s skill distribution and comparative advantage.