Neoliberalism and the European Public Procurement Regime

Abstract

Abstract This chapter briefly describes how neoliberalism achieved its current position as the dominating (if contested) ideology of the developed world and explains core neoliberal values and policy prescriptions, as well as the effect that they have had on public procurement. It explores the ideological importance of public procurement regulation from the neoliberal perspective and the features that neoliberal principles might suggest should be built into any international regime of public procurement regulation. It then describes the regulation of public procurement by the EU, which it argues maps closely onto the predicted neoliberal construct. It explains that, although the EU regime operates by extensively curtailing the purchasing discretion of public bodies in the Member States, neoliberal arguments have been advanced, and are currently being advanced, to curtail that discretion further. It analyses the extent to which such arguments have failed before the Court of Justice of the European Union to date and then explains the far-reaching additional arguments that are currently being advanced to neoliberalise the EU public procurement regime. These argue for the application of ‘competition’ (the ‘efficiency’ concept of competition) and the pursuit of ‘value for money’ as dominating norms for the system. This chapter then explains how the adoption of such norms would curtail the ability of public purchasers to pursue horizontal policies (the use of public procurement to achieve collateral policy goals such as environmental or social policy goals). It argues, however, that the suggested efficiency/value for money norms are not legally justified. This is because the concept of ‘competition’ to which EU public procurement regulation refers is not the neoliberal ‘efficiency’ concept, but a concept based upon economic freedom that is concerned with competitive equality and the structure of competition in public contracts markets. It is also because the present author accepts the argument that has been advanced by Sue Arrowsmith that, although the pursuit of ‘value for money’ is the central goal of the domestic regulation of public procurement, the legal bases on which EU public procurement legislation is founded do not permit it to mandate the pursuit of ‘value for money’ as a matter of European obligation. The chapter argues, in any event, that in the public procurement context, ‘value for money’ is a complex, multi-faceted and value-driven concept that does not equate to neoliberal notions of ‘efficiency’. Finally, it identifies an internal tension between two aspects of the neoliberal prescription in the public procurement context, the desire to constrain public purchaser discretion so as to preclude, in particular, the pursuit of horizontal policies on the one hand, and the preference to use ‘market-based’ instruments of policy rather than regulation on the other. It explains how a further neoliberal preoccupation, the constant need to improve international ‘competitiveness’, has provoked the EU to adopt (as part of its core economic strategy) the pursuit of horizontal policies in public procurement, both on a voluntary basis and as mandated by EU sectoral legislation. It concludes that by so doing, the EU has rejected a central tenet of neoliberal ideology as regards public procurement (hostility to the so-called ‘instrumental’ use of public procurement to implement horizontal policies) and that its direction of travel means that the neoliberal argument that public procurement must be regulated predominantly to achieve ‘efficiency’ has implicitly been discarded.