A Substantivist Conception of the Economy in Public Policy. Insights from Public Procurement for Cooperatives in Ecuador

Ecuador has constitutionally acknowledged a plural economy comprising private capitalistic and public statist forms of economic organization as well as a solidarity economy (SE) sector. SE organizations are collective initiatives undertaking the production of goods and services whose aim is not to maximize profit but to sustain the livelihoods of their members or the community and enhance democratization (Hillenkamp et al., 2013). They have emerged through historically particular institutional paths: the cooperative tradition, associations supported by the Catholic Church and development-oriented NGOs, and more recent expressions embedded in social movements (Ruiz-Rivera & Lemaître, 2019). The incorporation of the Buen Vivir paradigm in the constitution has led to debates on its operationalization, especially in public procurement programs—a flagship policy for Buen Vivir. The Buen Vivir discourse stands as a beacon of holistic development, emphasizing the well-being of individuals and communities over mere economic output (Caria & Domínguez, 2016). Despite the constitutional commitment to a substantive economy (Polanyi, 1977), policy implementation relies on formal indicators, revealing a tension between innovative constitutional principles and pragmatic governance. This paper aims to analyze public procurement programs in Ecuador as a prominent policy for SE promotion in Latin America. In particular, we elucidate the underlying economic rationales and normative references behind the evaluation criteria (i.e., technification, localization, formalization, and positive discrimination) underpinning public procurement and whether these criteria are rooted in a substantive understanding of the economy or a more conventional interpretation, according to Polanyi (1977). Through an inductive approach (8 months of ethnographic fieldwork, e.g., 36 semi-structured interviews and 6 focus groups conducted with government officials and SE organization members), our study explores discursive repertoires used by state authorities and practitioners' perceptions. Our findings reveal contradictions between SE organizations' ideals and policy foundations, leading to tensions within organizations and their institutional environment. A formal vision of the economy tends to overlook particular features within SE organizations. For instance, capacity assessments in public procurement programs focus on technification and professionalization, favouring modern technology over traditional knowledge and practices. Likewise, the emphasis on economic consolidation through specialization implies a minimalist view of organizations centred on production function efficiency over social aims. By combining macro-institutional (based on context analysis) and meso-level analyses, this research contributes to the debate on policy implementation in Latin America by advancing empirical research in the Ecuador of Buen Vivir paradigm. Our study highlights the tensions between a substantive approach to the economy and formal indicators in policy implementation and provides insights into the challenges in translating constitutional ideals into practical governance.