Economic Policy, Structural Change, and Political Conflict in Europe

Abstract

The European Union is undergoing a profound rethinking of its economic governance architecture. The reform of the Stability and Growth Pact, the rapid expansion of industrial policy instruments, and debates over strategic autonomy all reflect an urgent need to recalibrate how Europe sustains competitiveness, manages fiscal pressures, and responds to external shocks. Yet these policy shifts unfold in political environments marked by persistent territorial inequalities, the social consequences of structural economic change, and rising public contestation of globalization and migration. Understanding how citizens interpret these transformations, how political actors respond to economic incentives, and how redistribution and public service provision shape political behavior is crucial for assessing whether the EU can build durable support for its evolving economic and fiscal strategies. This panel brings together five papers that illuminate the political foundations and consequences of economic governance in Europe. They examine how external price shocks fuel political backlash even in the presence of EU subsidies (Malet/Bolet); how distributive politics can reshape domestic political coalitions (De Vries/Cremaschi); how citizens in post-industrial regions interpret structural economic decline and assign political responsibility (Jeannet); how the public understands and evaluates new forms of industrial policy (Bürgisser); and how perceived public service deprivation interacts with narratives about immigration to shape welfare preferences (Cremaschi/De Vries). Together, these papers interrogate whether the effectiveness of European economic governance, across industrial policy, redistribution, fiscal coordination, and welfare-state provision, rests not only on technocratic design but also on the societal responses, political incentives, and historical legacies that shape implementation and legitimacy. By integrating insights on economic adjustment, distributive politics, collective blame, welfare chauvinism, and the public’s evolving expectations of the state, the panel offers a comprehensive account of how Europe’s changing economic model interacts with democratic politics. In doing so, it sheds light on the political sustainability of competitiveness-focused, fiscally constrained policymaking in an era of geopolitical volatility, structural transformation, and intensifying distributive conflict. Discussants: Tarik Abou-Chadi (Oxford), Diane Bolet (Sciences Po Paris)

Title	Details
Domestic Consequences of International Financial Aid: Evidence from the Marshall Plan in Post-War Italy	View Paper Details
The Globalization Backlash in Rural Areas: Price Shocks, Radical Right Support, and the Limits of Agricultural Subsidies	View Paper Details
Public Service Deprivation and Welfare Chauvinist Preferences: Experimental Evidence from Italy	View Paper Details
Rusted Politics: How Citizens Attribute Blame for Deindustrialization	View Paper Details
How Do People Think About Industrial Policy? Survey Evidence from Germany and the United States	View Paper Details