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Public procurement – price-taker or market-shaper?

Sandra G. Hamilton (MIOIR – Manchester Institute of Innovation Research, The University of Manchester, Manchester, UK)

Critical Perspectives on International Business

ISSN: 1742-2043

Article publication date: 4 January 2022

Issue publication date: 15 June 2022

1153

Abstract

Purpose

This paper examines the role of government procurement as a social policy mechanism within a multilateral open trading system. Government regulations globally are being transformed to foster more responsible business conduct in multinational enterprises (MNEs). Yet, concern that sustainability may present a discriminatory barrier to trade has stalled the progress of sustainable public procurement (SPP) at the international level, raising questions regarding the role and scope of the World Trade Organisation’s (WTO) Government Procurement Agreement (GPA) to align taxpayer-funded contracts with the United Nations (UN) Sustainable Development Goals.

Design/methodology/approach

With a focus on social sustainability, this paper reviews the grey and academic literature to assess the changing landscape of public procurement policy and supply chain legislation in high-income countries.

Findings

Frontrunner nations are adopting a mandatory approach to sustainable public procurement and due diligence legislation is elevating supply chain risk from reputational damage to legal liability. While technological innovation and the clean, green production of manufactured goods dominates the sustainable public procurement literature, the social aspects of sustainability poverty, inequality and human rights remain underrepresented.

Research limitations/implications

The scope of this paper is limited to the examination of government procurement covered by the WTO-GPA (2012). Smaller value contracts, under the WTO-GPA thresholds and the category of defence are beyond the scope of the paper.

Social implications

The paper focusses on the underserved topic of social sustainability in business-to-government (B2G) – business to government – supply chains arguing that for responsible business conduct to become a competitive advantage, it must be more meaningfully rewarded on the demand-side of all taxpayer-funded contracts in organisation for economic co-operation and development countries. The paper introduces the idea of priceless procurement as a mechanism to build system capacity in the evaluation of non-financial sustainability objectives.

Originality/value

To build the capacity to stimulate competition based on social and environmental policy objectives, the paper introduces the concept of priceless procurement in B2G contracts.

Keywords

Citation

Hamilton, S.G. (2022), "Public procurement – price-taker or market-shaper?", Critical Perspectives on International Business, Vol. 18 No. 4, pp. 574-615. https://doi.org/10.1108/cpoib-08-2020-0116

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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