Marketization, Regulation, and Equality: Towards an Analytical Framework for Understanding the Equality Impact of Public Procurement

Abstract

With the rise of the regulatory welfare state, public procurement gained increasing importance as a tool for the regulation of wages and working conditions and a lever for promoting equality. Yet, despite growing attention to and understanding of public procurement’s relation to equality, existing knowledge remains fragmented. An analytical framework that captures and systematizes the multifaceted interaction between public procurement and equality is still missing. Focusing on conditions of purchasing and obligations set as part of the procurement processes, this article explores the way in which public procurement processes generate equality impacts first through stipulations and practices which are not explicitly linked to equality but generate equality impacts, and second through proactive measures designed to foster equality. It argues that a holistic understanding of public procurement’s equality impact needs to take account of the individual combination of features.

Public procurement and labour market inequality: Conceptualising a multi-faceted relationship

“…Particularly in labour-intensive sectors (Schulten and Brandt, 2012: 140), these contributed to pressures on labour costs (e.g. Sarter, 2022; Hermann and Flecker, 2012; Flecker and Herman, 2011; Kozek et al, 2012; Schulten and Brandt, 2012; Vrangbæk et al, 2015). This is compounded by the fact that contracting out implies challenges for collective bargaining as it leads to more fragmented provider structures and heterogeneous workforces that are harder to organise (Hermann et al, 2012; Ravenswood and Kaine, 2015; Schulten and Brandt, 2012).…”

“…In Federal States, such as Australia or Germany, the growing interest in leveraging public procurement's potential to regulate labour by using public bodies’ purchasing power is in part also a reflection of the aspirations of sub-national governments to shape policy areas, which domestically have been delegated to the national level (Sack and Sarter, 2018; Howe and Landau, 2015). Against the background of differentiated labour market integration and labour markets that are characterised by inequalities and horizontal and vertical segregation, cursorily neutral regulations and practices may have the effect of promoting equality in employment (Sarter, 2022 ). Take the example of minimum wages.…”

“…In recent decades, regulation gained growing importance (Braithwaite, 2008), becoming the primary mode of governance in many European welfare states (Majone, 1994, 1997, 1999). With a shift towards regulation, the regulatory potential of public spending came into focus (Hartlapp, 2020; Sarter, 2022). 1 As policymakers in different countries and regions turn to public procurement as a policy tool, public contracts are used in a variety of contexts to foster an array of social goals.…”

“…With employment embedded in different conditionalities and conditions, also apparently neutral arrangements are likely to shed differentiated impacts (e.g. Himmelweit, 2002; Sarter, 2022). Against this background, it has been argued that any policy that does not take the diverse living circumstances and lived experiences into account may fail to successfully foster the aims it set out to achieve (Himmelweit, 2002), an argument that has also been put forth in relation to public procurement (Sarter, 2022).…”

“…Himmelweit, 2002; Sarter, 2022). Against this background, it has been argued that any policy that does not take the diverse living circumstances and lived experiences into account may fail to successfully foster the aims it set out to achieve (Himmelweit, 2002), an argument that has also been put forth in relation to public procurement (Sarter, 2022). With a particular view to the post-pandemic recovery, Elson (2022) argues that for policies to have a substantial positive impact on equality in the longer term, they need to encompass considerations of ‘the institutions and configurations of economic power that give rise to incomes and wealth and wellbeing pre-tax and transfer (predistribution)’ (Elson, 2022: 136), including a reconsideration of competition policy and public procurement.…”