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How Government Procurement Creates a Two-Tier Economy
Episode 69 of The Fiscal Policy Podcast explores why government contractors—from office supply vendors to IT consultants—routinely charge the public sector 30 to 50 percent more than private clients for identical goods and services. Lucas and Luna examine the 2024 RAND Corporation study that found the premium is driven not by government incompetence but by unique procurement regulations, risk-averse contracting officers, and a concentrated supplier base that faces little price pressure. Using the example of simple office furniture, they trace how a $400 private-sector desk becomes a $620…
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