This article analyses different types of labour clauses in public procurement regulation that have been enacted in Germany, a coordinated market economy that has experienced a ‘neoliberal drift’ including the decline of the traditional governance of labour and contracting out. Based on an analysis of relevant regulations adopted by the 16 Germany federal states, the article corroborates insights into the prominent role of left parties advocating for labour clauses in public procurement on a much broader empirical foundation than previous research. It adds to scholarly knowledge by revealing that the relative comparative advantage of regions with lower wage levels inhibits labour clauses in federal political systems. It finds that centre-right parties are willing to stipulate certain labour clauses in order to protect small-and medium-sized enterprises, which are core parts of their electoral support base.
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