WEBINAR RECORDING · 2025-07
Government Procurement and Trade: New Evidence
In this conversation: Filippo Santi; discussant Anirudh Shingal; moderators Ben Shepherd and Hanna Norberg.
Ugandan procurement raises suppliers’ sales but crowds out their private business without clear evidence of lasting capacity expansion. Filippo Santi and Anirudh Shingal distinguish commercial gains for contractors from the broader development and trade objectives governments hope procurement will deliver.
Session information draws on the recording and its original description. Affiliations and policy context refer to the time of the webinar.
FROM THE CONVERSATION
Three takeaways.
What they mean in practice.
Prepared from the session recording using automatic transcription and editorial review. Follow the timestamp links for the original wording and context.
A government customer can displace private business
Watch 24:32 ↗Using linked Ugandan tax and transaction data for 2012–2019, Santi tracks entry into and exit from government supply. Sales rise after entry, while sales to private customers fall persistently. On exit, private sales recover but do not fully replace lost government sales. Comparable large private buyers do not generate the same displacement pattern.
Policy interpretation: Assess procurement by additional activity and durable firm development, not contractors’ headline sales growth alone.
Revenue growth is not the same as capacity growth
Watch 27:05 ↗Sales per employee increase, but value added per employee does not show the same improvement. A later supplier survey points to higher government prices and longer contracts, alongside uncertainty about future demand, as explanations for reallocating existing capacity rather than expanding it. The administrative data lack unit prices, so the price mechanism remains suggestive.
Policy interpretation: Diagnose the constraints and incentives that prevent expansion; distinguish price gains from productivity gains.
Domestic sourcing can leave imported inputs upstream
Watch 33:55 ↗Santi’s additional trade evidence suggests suppliers can satisfy domestic sourcing requirements by buying from local firms that themselves import. Direct foreign content therefore misses part of the international supply chain. He presents this extension as descriptive evidence, rather than a complete evaluation of the later Buy Uganda policy.
Policy interpretation: Measure imported content through suppliers as well as contractors before treating local purchases as domestic value creation.
From the discussion
At 40:24–47:42, Shingal proposes separating sectors by procurement intensity and product differentiation, connecting the results to theories of home bias. Questions about payment reliability, tailored products, and political connections highlight competing mechanisms. At 48:33–50:14, Santi acknowledges that firm political ties cannot be tested with the available data. He closes by arguing that public spending is one development instrument, not a substitute for understanding why firms remain small.
