By reference to the paradigms of ‘Selective Adaptation’ and ‘Institutional Capacity’, this article attempts to examine the implementation of the Agreement on Government Procurement (GPA) in Japan and to explore the elements that affect the effectiveness of the GPA in Japan. The author considers the linkage between the World Trade Organization (WTO), the GPA, and local governance reform and argues that it will be in Japan’s interests to further liberalise its government procurement market by lowering the threshold, especially in terms of the sector of construction services. More open competition and international pressure will serve as a driving force to improve the transparency and fairness in Japan’s government procurement framework and better achieve the goal of ‘value for money’.