WellFed - Welfare Federalism in Germany and the United States
Free University Berlin
Otto Suhr Institute of Political Science
The WellFed project is funded by the James Madison Charitable Trust (JMCT) for the Study of Federal Systems.
WellFed
Federalism is often portrayed as a barrier to welfare state expansion: When regions compete to attract businesses, they risk triggering a ‘race to the bottom’, reducing tax revenues and undermining social protection. Meanwhile, subnational veto powers may block social policy initiatives at the centre, constraining attempts at welfare activism ‘from above’.
Yet recent experiences show a different trend. Across advanced industrial democracies, federal states have increasingly used their purchasing power to promote fair wages, equality, and inclusive labour markets – pursuing social policy by other means than traditional welfare policy. Striking examples include the diffusion of Prevailing Wage Laws across more than half of U.S. states and the spread of social clauses in procurement regulations in most German Länder.
When, then, federal states use their purchasing power to advance social goals – and when do they instead stick to a pure market logic?
The WellFed project explores the conditions under which subnational governments employ their financial means to socially regulate markets – whether by promoting labour market inclusion, fair working conditions, or gender equality.
Empirically, WellFed compiles an original dataset tracking when and how social clauses have been introduced into procurement laws across 16 German Länder and 50 U.S. states since 1999. The dataset is complemented by indicators capturing government ideology, trade union strength, industrial structure, and administrative capacity at the time of reforms.
Using Qualitative Comparative Analysis (QCA), WellFed uncovers how specific combinations of political, economic, and institutional factors lead to distinct pathways of social regulation in procurement – ranging from inclusion-focused to modernisation-oriented strategies.
The transatlantic comparison undertaken by WellFed contributes to a deeper understanding of how distinct federal architectures – cooperative in Germany and competitive in the United States – condition the scope for welfare reform. The project’s empirical insights will further enrich policy debates on socially responsible procurement in Germany and within the European Union.
WellFed complements the SProcure research programme, a multi-annual, collaborative DFG-funded project that investigates how governments pursue strategic objectives (including green, social, and innovation goals) through public procurement.