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Utilizing Affirmative Action in Public Sector Procurement as a Local Economic Development Strategy

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  • Timothy Bates

    (University of North Carolina, Chapel Hill)

Abstract

Using detailed spending and survey data of a large local governmental authority, this study analyzes how actual preferential procurement policies affected minority business enterprises (MBEs) selling to government clients. Current public sector preferential procurement policies have evolved in an environment of legal constraints in which procurement spending targeting MBEs has often been viewed as reverse discrimination. The objective of achieving a “level playing field†was adopted in response to this legal environment. Preferential procurement policies often miss their objectives, achieving perverse outcomes such as minimal assistance to MBEs and negligible local economic development impacts. Strategies for simultaneously achieving fundamental fairness in government procurement while increasing MBE capacity and job creation are identified.

Suggested Citation

  • Timothy Bates, 2009. "Utilizing Affirmative Action in Public Sector Procurement as a Local Economic Development Strategy," Economic Development Quarterly, , vol. 23(3), pages 180-192, August.
    • Handle: RePEc:sae:ecdequ:v:23:y:2009:i:3:p:180-192
    DOI: 10.1177/0891242409333549
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    References listed on IDEAS

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    1. Timothy Bates & William D. Bradford, 2008. "Venture‐Capital Investment in Minority Business," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(2‐3), pages 489-504, March.
    2. Robert W. Fairlie & Alicia M. Robb, 2008. "Race and Entrepreneurial Success: Black-, Asian-, and White-Owned Businesses in the United States," MIT Press Books, The MIT Press, edition 1, volume 1, number 026206281x, December.
    3. Roger Waldinger & Thomas Bailey, 1991. "The Continuing Significance of Race: Racial Conflict and Racial Discrimination in Construction," Politics & Society, , vol. 19(3), pages 291-323, September.
    4. Ken Cavalluzzo & John Wolken, 2005. "Small Business Loan Turndowns, Personal Wealth, and Discrimination," The Journal of Business, University of Chicago Press, vol. 78(6), pages 2153-2178, November.
    5. Timothy Bates & Darrell Williams, 1995. "Preferential Procurement Programs Do Not Necessarily Help Minority-Owned Business," Working Papers 95-1, Center for Economic Studies, U.S. Census Bureau.
    6. Timothy Bates, 1995. "Why do Minority Business Development Programs Generate so Little Minority Business Development?," Economic Development Quarterly, , vol. 9(1), pages 3-14, February.
    7. David G. Blanchflower & Phillip B. Levine & David J. Zimmerman, 2003. "Discrimination in the Small-Business Credit Market," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 930-943, November.
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    Cited by:

    1. Timothy Bates & Joseph Farhat & Colleen Casey, 2022. "The Economic Development Potential of Minority-Owned Businesses," Economic Development Quarterly, , vol. 36(1), pages 43-56, February.
    2. Lois M. Shelton & Maria Minniti, 2018. "Enhancing product market access: Minority entrepreneurship, status leveraging, and preferential procurement programs," Small Business Economics, Springer, vol. 50(3), pages 481-498, March.
    3. Pan, Mengyang & Hill, James & Blount, Ian & Rungtusanatham, Manus, 2022. "Relationship building and minority business growth: Does participating in activities sponsored by institutional intermediaries help?," Journal of Business Research, Elsevier, vol. 142(C), pages 830-843.
    4. Timothy Bates & Alicia Robb, 2013. "Greater Access to Capital Is Needed to Unleash the Local Economic Development Potential of Minority-Owned Businesses," Economic Development Quarterly, , vol. 27(3), pages 250-259, August.
    5. Elsie Harper-Anderson, 2012. "Exploring What Greening the Economy Means for African American Workers, Entrepreneurs, and Communities," Economic Development Quarterly, , vol. 26(2), pages 162-177, May.
    6. Grant H. Lewis, 2017. "Effects of federal socioeconomic contracting preferences," Small Business Economics, Springer, vol. 49(4), pages 763-783, December.

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