Description
After decades of being discredited and even stigmatized, industrial policy has made a powerful comeback in recent years. Governments worldwide are increasingly willing to direct economic activities toward strategically important technologies such as semiconductors, cloud computing, and batteries.
The literature generally attributes this resurgence of market activism to two factors: First, the neoliberal economic policy consensus that dominated for decades has been re-politicized, as influential actors across the political spectrum have called for more government intervention to address problems ranging from climate change to economic inequality to regional decline. Second, economic policymaking has become increasingly geopoliticized, as economic rationales have become increasingly enmeshed with geopolitical and geoeconomic ones.
Against this background, I have been looking at both the coalitional politics underlying the return of market-directing policies and how such industrial policies actually work (or don’t work), mostly focusing on the European Union.
Resources
This article sets out to explain the drivers of the EU’s historic shift away from market-creation and towards supranational market-direction, focusing on Europe’s evolving technological and geopolitical landscape, coalitional politics, and the role of technological sovereignty discourse.
This special issue will look at how industrial policy actually works ‘on the ground’, that is, how states actually ‘do’ industrial policy in an increasingly geo-tech world.
This paper looks at one of the key tools in Europe’s growing industrial policy toolbox: the Important Projects of Common European Interest or IPCEIs. IPCEIs are subject to a complex governance architecture by which the Commission’s Directorate-General for Competition wants to ensure that projects meet its demanding eligibility & compatibility criteria—which form the heart of the IPCEI conditionality regime. While conditionalities are rightly considered key to an effective and equitable industrial policy, in the paper, we argue and empirically show that conditionalities also come with costs and are shaped by the specific ideational, institutional and political constraints within which they emerge. Rather than throwing out conditionalities altogether, we thus argue to more carefully balance their costs and benefits as well as to think more carefully about the constraints that give rise to them. This policy brief outlines concrete policy suggestions stemming from this argument in greater detail.
This paper offers a deep dive into the history of the IPCEI instrument, from the Treaty of Rome to the 2014 IPCEI communication. Introducing the concept of institutional activation, the paper sheds light on three historical episodes. 1) It offers a detailed reconstruction of how the ‘IPCEI article’ (today 107(3)(b) TFEU) emerged during the negotiations leading up to the Treaty of Rome. 2) 2) It discusses how the article evolved over the ensuing decades, remaining mostly dormant despite some discussions in the 1980s to provide more explicit guidance. 3) It reconstructs how institutional entrepreneurs used the article to push for a more ambitious industrial policy in the context of state aid modernization, eventually resulting in the creation of a standalone policy instrument.
I have unpublished work exploring the evolution of the EU state aid regime—focusing on the General Block Exemption Regulation (GBER) and IPCEIs—which argues that EU industrial policy primarily operates through indirect regulatory steering. By defining what constitutes permissible state aid (and what does not), the Commission employs rules as tools—using regulation as an industrial policy instrument to guide markets by influencing member states’ targeted spending in line with broader EU priorities.
In another early-stage project we plan to combine survey experiments and AI-conducted qualitative interviews to better understand how citizens reason about and navigate trade-offs involved with industrial policy (e.g. securing geoeconomic autonomy vs jobs vs climate change vs consumer prices).