Measuring and Comparing the Regulatory Welfare State: Social Objectives in Public Procurement

• Author: Miriam Hartlapp
• DOI: 10.1177/0002716220952060
• Published date: 01 September 2020
• Date: 01 September 2020

68 ANNALS, AAPSS, 691, September 2020

DOI: 10.1177/0002716220952060

Measuring and

Comparing the

Regulatory

Welfare State:

Social

Objectives in

Public

Procurement

By

MIRIAM HARTLAPP

952060ANN THE ANNALS OF THE AMERICAN ACADEMYMeasuring and Comparing the Welfare State

research-article2020

This article constructs an index that translates the sub-

stance of policy documents into numeric values across

three dimensions of regulation—a qualitative assess-

ment of policy substance, its potential impact, and

enforcement of regulation—which aims to capture the

strength of social objectives in the economy. It draws on

theories of economic regulation and literature on the

welfare state to develop a general understanding of

social objectives. The use of the index is illustrated

through public procurement regulation in two European

countries (France and Germany) and shows an overall

increase in the strength of social objectives. It also high-

lights systematic differences in country priorities in the

regulation of their economy. The index demonstrates

that social regulation can be measured and compared in

a meaningful way within and across countries.

Keywords: public procurement; regulation; social goals

Freer markets come with more rules (Vogel

1998), but the rules do not relate exclu-

sively to competition and price efficiency. Free

market rules can promote other objectives,

such as welfare norms and social ends. Such

rules ensure that services offered in hospitals

meet standards of maximum working hours or

that mortgage credits offer old age security.

The literature on the regulatory welfare state

(RWS) provides analytical leverage in studying

Miriam Hartlapp is a professor of comparative politics

(Germany and France) at the Freie Universität Berlin.

She teaches and researches European integration and

comparative politics, in particular questions of power,

contestation, and conflict in the EU Multilevel System;

the intersection of economic and social integration; as

well as implementation and compliance.

NOTE: An earlier version of this article was presented

at the workshop “Regulation & Welfare” at Jerusalem

University, May 2019. I wish to thank all participants

for the discussion, Konstantin Schönfelder and Léonore

Stangherlin for valuable research assistance, and the

two anonymous reviewers as well as the editors of this

special issue for their excellent comments.

Correspondence: Miriam.hartlapp@fu-berlin.de

MEASURING AND COMPARING THE WELFARE STATE 69

these developments (Windholz and Hodge 2013; Levi-Faur 2014; Benish and

Levi-Faur, this volume). Yet scholars interested in the RWS have mostly focused

on social policies, and there are few analyses that study how regulation addresses

social objectives in other policy fields, such as the provision of utilities or financial

products (Haber 2018; Eckert 2018; Schwartz 2009; Hartlapp and Rauh 2013).

This is unfortunate, because regulation has the potential to create more solidarity

and equality among different groups of market participants, create social cohe-

sion in societies, and promote justice in access or consumption of goods and

services that link directly to economic policy. One example is that of public pro-

curement: regulation can create more solidarity by requiring that the footballs

used in public schools and produced in the Global South have been sewed by

adults rather than children. It can create social cohesion by requiring the bidder

to ensure payment of collective wages in its production chain and promote justice

by setting aside a certain percentage of jobs in public construction sites to groups

of citizens discriminated against in the labor market. Furthermore, existing stud-

ies focus on single instruments or country cases, and are limited in the time

period that they cover.

This article develops an index of regulation for social purposes that works

toward systematizing our knowledge of the RWS, and potentially yielding com-

parative insights. I go on to illustrate use of the index for public procurement, a

topic that lends itself to the study of regulation for social purposes beyond the

field of social policy. Public procurement regulation aims to support and promote

competition and flexibility in public contracting. It targets private enterprises,

intermediaries, and supply chains, and regulates production as well as products.

Public procurement regulation applies to anything from purchasing food for

public schools to large-scale infrastructure construction. In terms of scale, public

procurement is an economically significant policy area, with about 14 percent of

GDP spent on public contracts across the European Union (EU) (European

Commission 2016) and an estimated $1.5 trillion annually in the United States

(Conway 2012, 143).

Public procurement is an interesting subject for study in social regulation not

just because of the volume of government spending that is channeled into the

economy. Two other reasons are material to my arguments in this article. First,

in a narrow sense, public procurement regulation has the potential to render a

market more social for equal levels of spending. When purchasing workwear for

$ 1,000, a public enterprise can go to a sweatshop or buy fair trade labels. Thus,

for equal spending levels, a state can decide whether to spend money on the basis

of a pure cost-benefit analysis, or whether to also include social goals (McCrudden

2004; Wiesbrock 2015). Critics argue that social criteria in public procurement

distort the market, create unnecessary complexity, and increase prices (e.g.,

Sánchez-Graells 2015; for an overview see Conway 2012, 146). Therefore, some

public procurement regimes prohibit their use. Where contracts are awarded to

bidders offering lower prices, enterprises are unlikely to respect collective agree-

ments or will discriminate against less advantaged groups in the labor market.

Similarly, without social criteria, products offered at a lower price are likely to be

purchased without regard, for example, for unfair working conditions. Social