The research programme Political Economy and Public Policy, coordinated by Alexandre Afonso and Natascha van der Zwan, gathers scholars from the Institute of Public Administration using the perspective and tools of comparative and international political economy to understand the major economic and societal transformations of our time and their implications for state intervention. Political economy is the field of study that focuses on the interplay between politics, the state and the economy. In other words: how do politics and policies shape the organisation of the economy and how does the economy influence politics and policies?  

A central tenet of the programme is its focus on case-based research, institutional context and historical processes: to confront today’s most important societal challenges, it is imperative to know how they are rooted in the political choices of the past and understand the nuances of different state-market relations. Scholars in the programme study how political interventions like the welfare state or the international monetary system have shaped the organisation of the (global) economy. They focus on the interactions between economic actors and the political sphere, for example the power of multi-national corporations in setting regulation, the role of technocrats in public policy-making or the struggle between employers’ organizations and trade unions over corporate governance.

Topics include, but are not limited to, international migration, technological change, industrial policy, green and sustainable finance, and health inequalities. The group has a strong focus on comparisons across countries and across different levels and fields of public policy-making, drawing on a range of qualitative and quantitative tools to study the interconnectedness between the economy and the political sphere.   

Political Economy Perspectives on Societal Challenges

The research programme consists of a number of projects that each apply a political economy perspective to pertinent societal issues. The project “Borders of Equality: Welfare States and Immigration Policies in Western Europe in Comparative and Historical Perspective” (2018-2023) is led by Alexandre Afonso and funded by a NWO VIDI grant. The project “Making Finance Sustainable: A Comparative Perspective on the Politics of Investment” (2023-2028) is led by Natascha van der Zwan and funded by a NWO VIDI grant. The project “Political Economy of the Green and Digital Transition at the Intersection of Local, National and European Levels” is led by Fabio Bulfone and Sebastian Diessner and funded by a Starters Grant (Ministry of Education, Culture and Science).

The Borders of Equality: Welfare States and Immigration Policies in Western Europe in Comparative and Historical Perspective

Project lead: Alexandre Afonso

This NWO- VIDI project analyses the relationship between the evolution of welfare states and migration policies in Western Europe between 1870 and now, assessing whether there is a trade-off between social protection and openness to immigration. While there is a large body of research on how immigration affects citizens’ preferences for welfare and redistribution, we know little about how welfare states shape immigration policies and migrants’ access to welfare benefits. Do countries with larger welfare states also enforce stricter immigration policies? When do governments enforce stricter migration policies but provide equal access to welfare for migrants (closure with equality), and when do they enforce liberal immigration policies but restrict their rights to welfare (openness with segmentation)?

Making Finance Sustainable? A Comparative Perspective on the Politics of Investment

Project lead: Natascha van der Zwan

This project takes a comparative political economy approach to study the effects of governance on sustainable investment by large investors like insurance companies and pension funds. Sustainable investment involves the application of environmental criteria to financial investments. Despite increased policy interventions and political activism around sustainable investment, however, large investors have yet to realize the goal stated in the 2015 Paris Agreement: making “finance flows consistent with a pathway towards low greenhouse gas emissions and climate resilient development” (Article 2.1 sub c). Bringing comparative political economy into conversation with economic and sociological studies of sustainable investment, the project seeks to understand how different types of political economies, each with their own institutional characteristics and modes of governance, produce distinct sustainable investment outcomes. Taking an actor-centered institutionalist approach, we investigate governance at three distinct levels: the macro-organisation of the political economy, financial policy-making processes, and the micro-level governance of the investment process.

Political Economy of the Green and Digital Transition at the Intersection of Local, National and European Levels

Project leads: Fabio Bulfone and Sebastian Diessner

This project analyses the green and digital transition in Europe through the lens of comparative and international political economy. The European Commission's pursuit of the twin transitions has marked the revival of industrial policy and state intervention in economic affairs in Europe, while the landmark agreement on the Next Generation EU has endowed the EU with a long-term fiscal capacity financed by issuing its own bonds. This combination of new financial resources and increased economic activism is striking after several decades during which the Commission and other key actors have championed fiscal consolidation, liberalisation, privatisation, new public management reforms and strict limits on the provision of state aid to national economies. How can we make sense of these momentous ideological and institutional shifts? How does the green and digital transition play out in different national and sub-national institutional contexts? And what is the role of policy makers, stakeholders and citizens in these reform processes?

• political economy