Who Drives the Transition? Institutional Adaptation and the Politics of Green Industrial Policies

Abstract:

This article proposal explores the divergent responses of France and Germany to the electrification of the automotive industry, focusing on the period from 2010 to 2025. It asks how institutional configurations shape the capacity of states to drive green industrial transitions. While Germany’s corporatist model, characterised by strong coordination between firms, unions, and political parties, has historically facilitated export-oriented industrial success, it has struggled to adapt to the disruptive challenges posed by the shift to electric vehicles (EVs). Conversely, France’s technocratic governance, marked by centralised state intervention and fragmented industrial and political actors, has enabled bureaucrats to implement ambitious and innovative green industrial policies. This study seeks to explain why France, despite its historical deindustrialisation and conflictual industrial relations, has managed to pursue transformative policies, while Germany’s coordinated market economy has faced significant barriers to change.
The analysis is grounded in the literature on comparative political economy, particularly the Varieties of Capitalism (VoC) framework, which distinguishes between Liberal Market Economies (LMEs), Coordinated Market Economies (CMEs), and hybrid models. Germany is typically classified as a CME, celebrated for its ability to foster consensus and long-term industrial planning, while France is often described as a hybrid or state-led economy, characterised by centralised bureaucratic intervention and weaker industrial coordination. However, the VoC framework is limited by its underemphasis on the role of the state in driving economic transitions. This study builds on recent scholarship that highlights the dynamic and contested nature of institutional adaptation and the critical role of bureaucratic actors in shaping industrial policy. It also engages with the political economy of green transitions, emphasising the importance of state intervention and the challenges of decarbonising incumbent industries. By comparing France and Germany, this research explores how different institutional configurations, corporatist coordination versus technocratic centralisation, shape the politics of green industrial policy.
The study focuses on France and Germany, two of Europe’s largest automotive producers, which have pursued markedly different strategies in response to the electrification of the automotive industry. The research combines 57 semi-structured elite interviews with civil servants, business representatives, trade unionists, and NGOs in both countries with documentary analysis of policy documents, legislative texts, industry reports, and media coverage from 2010 to 2025. Quantitative data are also used to contextualise policy decisions and impacts. The analysis is structured around three key fields of actors: industrial (carmakers, suppliers, and trade unions), state-political (ministers, parliamentarians, party officials and civil servants), and social (NGOs and union bureaucrats notably). By examining the interactions between these actors, the study identifies how institutional configurations shape policy outcomes in the face of technological disruption.
The findings analyses how Germany’s corporatist system has struggled to adapt to the challenges of electrification. The transition to EVs threatens job losses and value redistribution away from traditional suppliers and unions. The Dieselgate scandal of 2015 and subsequent regulatory changes forced German carmakers to invest in EVs, but internal conflicts have undermined policy coherence. As a consequence, the German government’s Ampelkoalition (2021–2025) was divided over EV subsidies, e-fuels, and the 2035 phase-out of internal combustion engines. The Free Democratic Party’s (FDP) defence of e-fuels, a niche technology favoured by Porsche, and the Greens’ push for stricter environmental regulations created policy gridlock. IG Metall and specialised suppliers resisted radical change, fearing job losses, which led to renewed opposition to ICE phaseout and insistence on hydrogen investments. The rise of Chinese EV manufacturers and Tesla further exacerbated tensions, as German carmakers struggled to compete on cost and innovation.
In contrast, France’s technocratic system, despite its fragmented industrial relations, has enabled bureaucrats to drive ambitious green industrial policies. The score environnemental, a protectionist measure targeting EV subsidies, and the social leasing scheme exemplify how bureaucratic actors leveraged state capacity to promote domestic production and social equity. Civil servants in the Direction Générale des Entreprises (DGE) and Direction Générale de l'Énergie et du Climat (DGEC) played a central role in designing and implementing EV policies, often circumventing political and industrial opposition. The score environnemental excluded high-carbon imported EVs from subsidies, effectively protecting domestic and European producers, while the social leasing scheme targeted low-income households, combining environmental and social goals.
The study reveals that corporatist systems, such as Germany’s, are effective for incremental innovation but struggle with radical transitions due to veto players and entrenched interests. Technocratic systems, like France’s, can implement disruptive policies but face challenges in sustaining industrial consensus and managing external competition. These findings contribute to the literature on comparative political economy and green transitions by demonstrating how technological disruption can reshape power dynamics within and across institutional fields. The research highlights the critical role of bureaucratic actors in driving green industrial policy, particularly in fragmented systems where political and industrial actors are weak or divided. The findings call for a reassessment of frameworks in comparative political economy to account for the dynamic role of the state, particularly its civil servants, in the age of green transitions.