ABSTRACT: This South Centre Analytical Note looks at the donor-driven agenda in the reform of public procurement—the rules that guide government purchasing of goods, works and services—as one of the major components in the good governance agenda being incorporated by donors into their aid programmes. This Analytical Note stresses that such an agenda vis-à-vis government procurement not only restricts the flexibility of developing country governments to use public procurement as a policy tool for development, but also has significant consequences for local firms that rely on government contracts.