Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum

to the European Innovation Scoreboard, the US is outperforming the
EU in 11 out of the 15 most important drivers of innovation. 3 The EU
may be producing more science and engineering graduates than the US
and employing more workers in medium-high- and high-technology
manufacturing, but expenditure on R&D in the US is far greater than it is
in the EU. According to the latest figures, gross domestic expenditure on
R&D in the EU15 was around 71% of US level, which is roughly the same
level as in 2000. 4
These conditions are made more problematic by fading political
momentum for the Lisbon reform agenda. The early formulation of the
Lisbon strategy, with its emphasis on social inclusion, was inspired by
a modernised, centre-left vision which, at that time, resonated with a
majority of member states. Since 2005, this was replaced by a conservative
counterpoint focused on growth and competitiveness, reflecting the
emergence of a centre-right majority in the Council. However, neither of
these approaches managed to win the confidence of the general public,
which remains unsure about whether the EU is having a positive impact
on employment and social affairs. 5 This point is crucial since an economic
governance strategy must be legitimate in the minds of the public as well
as the member state governments if it is to bear lasting fruits.
This paper seeks to understand the Lisbon Strategy through the lens of
a stylised version of the Varieties of Capitalism (VoC) literature. This
stream of political economy emphasises the importance of institutional
complementarities for national economic performance. 6 Its central finding
is that there is no one path to economic success and that the effectiveness
of economic policies will vary from one country to another according to
the underlying model of capitalism. The theoretical and empirical insights
of the VoC paradigm are very useful, we think, for understanding the
Lisbon Strategy’s achievements and shortcomings over the last decade.
The VoC approach also offers food for thought regarding the direction of
EU economy policy beyond the current economic and financial crisis.
A stylised presentation of the
Varieties of Capitalism approach
Peter Hall and David Soskice set out the central tenets of the VoC
approach in an introduction to their edited book in 2001, which rapidly
became one of the main paradigms for political-economy analysis. 7 To put
it (very) simply, the VoC can be understood as an attempt to build a new
framework for understanding capitalist economies. In Liberal Market
Economies (LMEs, e.g. the US or the UK), coordination among economic
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After the crisis: A new socio-economic settlement for the EU