WTO Government Procurement Rules and the Local Dynamics of Procurement Policies : A Malaysian Case Study

This article examines efforts to create binding international rules regulating public procurement and considers, in particular, the failure to reach a WTO agreement on transparency in government procurement. The particular focus of the discussion is the approach taken by Malaysia to these international procurement rules and to the negotiation of an agreement on transparency. Rules governing public procurement directly implicate fundamental arrangements of authority amongst and between different parts of government, its citizens and non-citizens. At the same time, the rules touch upon areas that are particularly sensitive for some developing countries. Many governments use preferences in public procurement to accomplish important redistributive and developmental goals. Malaysia has long used significant preferences in public procurement to further sensitive developmental policies targeted at improving the economic strength of native Malays. Malaysia also has political and legal arrangements substantially at odds with fundamental elements of proposed global public procurement rules. Malaysia has, therefore, been forceful in resisting being bound by international public procurement rules, and has played an important role in defeating the proposed agreement on transparency. We suggest that our case study has implications beyond procurement. The development of international public procurement rules appears to be guided by many of the same values that guide the broader effort to create a global administrative law. This case study, therefore, has implications for the broader exploration of these efforts to develop a global administrative law, in particular the relationship between such efforts and the interests of developing countries