A Polanyian approach to regulatory welfare as the ‘embeddedness’ of market: implications for investigating and implementing public procurement policies

While social security’s functions of labour decommodification have long been the focus of social policy studies, the regulatory roles of social welfare are overlooked. Drawing on Polanyian theories of ‘embeddedness’, markets are inherently embedded in social relations and welfare institutions. Regulations of welfare states refer to the intervention executed by the public sectors involving standard-setting and rulemaking in the wake of privatisation and marketisation. If welfare provision aims to minimise workers’ reliance on the market to meet their basic needs, regulatory welfare, including all forms of state’s control over market transactions, corporate behaviour, and individuals’ activities, attempts to place market under social forces, protect citizens against social risks, and reduce social inequalities.

Accordingly, this paper presents an analytical framework explaining regulatory welfare’s driving forces (inputs), policy interventions (outputs), and social consequences (outcomes); it also proposes a typology of regulatory welfare, premised on principles, tools, and power, encompassing the coercive, collaborative, and voluntarist regulations. The configurations of regulatory welfare are shaped by institutional legacies, actors’ relative strength, and competing ideas.

With purchasing and steering actions governing the mode of market competition, public procurement policies could be reconsidered a form of regulatory welfare to advance the quality of public services and employment. Regardless of the use of legislation, sanctions are incorporated in public contracts to prevent subcontractors’ non-compliance. However, current literature reveals that the implementation, monitoring, and enforcement matter to the materialisation of regulations. This calls for more attention to stakeholders’ lived experience in the downstream administration of public procurement policies.

This paper makes two contributions. First, informed by Polanyian theories, it enriches the concepts of regulatory welfare centred on the market-making and market-embedding roles that produce (re)distributive outcomes. Second, this paper links public procurement to welfare states’ regulatory space, expanding the scope of social policy research beyond provision and financing.