Quote of the day

"Suppose that governments are the only buyers of a certain product. Each one wishes to encourage production in its own jurisdiction, and therefore lets it be known that a firm’s bid will be seriously considered only if the product is supplied from a local plant. There will then be a strong incentive for plants to be located in all jurisdictions. Such proliferation of plants may result in production being carried out at sub-optimal scales. In general it can be said that, when major buyers practise discrimination, optimal allocations of orders to plants and optimal plant sizes and locations are less likely to be achieved."

D. L. Mclachlan, Discriminatory public procurement economic integration and the role of bureaucracy, JCMS, Vol XXIII, June 1985