The institutional paradox of a substantivist conception of the economy in public policy: Insights from public procurement for solidarity economy in Ecuador

Ecuador's 2008 Constitution advanced an ambitious substantive economic vision through Buen Vivir (Good Living), recognizing a plural economy which encompasses private, public and solidarity economy (SE) sectors. This paper aims to analyze public procurement programs in Ecuador, one of the flagship Buen Vivir policies for SE promotion. Drawing on Polanyi's distinction between formal (market‐centric) and substantive (life‐sustaining, socially embedded) conceptions of the economy, we analyze the evaluation criteria governing SE organizations’ access to public procurement. Based on qualitative research during Ecuador's SE promotion momentum (2008–2017)—including 31 interviews with government officials and SE organization members, documentary analysis and observation—we examine four criteria: installed capacity, territorial scope, associativity, and positive discrimination. Our findings reveal systematic tensions between substantive policy discourse and formal implementation practices. Evaluation criteria privilege technification, formalization and bureaucratic compliance over traditional knowledge, solidarity networks and participatory democracy, reinforcing rather than challenging market rationalities. We reveal an institutionalization paradox: policies designed to support alternative economic models inadvertently reproduce the market rationalities they seek to transcend, confining SE to subsidiary roles. Our analysis uncovers deeper epistemic and institutional barriers to realizing economic plurality through state policy and offers insights into SE institutionalization challenges globally.