Fiscal Capacity Revisited: Technopolitical Coalitions and Off‐Balance‐Sheet Instruments in Europe’s Green Industrial Policy

This article examines how fiscal constraints influence the development of contemporary industrial policy, with a focus on European initiatives to encourage green growth and sustainability. Due to high debt levels and the EU’s strict fiscal regime, governments are turning to off-balance-sheet financial instruments to enable investment without formally increasing public debt. Consequently, off-balance-sheet policies broaden the scope of fiscal capacity beyond the traditional realms of taxation and spending. I argue that the successful design of such policies requires intricate technical considerations and thus depends on the formation of “techno-political coalitions”: alliances combining technical expertise and…

• EU
  European University Institute