consistent with a policy-making environment in the UK dominated by a neoclassical, and often neoliberal, economic paradigm. In Germany, the neoliberally
minded finance ministry was also opposed to a technology-specific feed-in tariff.
However, the wider German policy paradigm was more influenced by the concept
of ‘Ordoliberalism’, a social market approach developed in Germany after the Second
World War, which laid much greater emphasis on active government intervention
to ensure competition and prevent monopolistic or oligopolistic market power
(Toke and Lauber, 2007).
Ordoliberalism also turned out to be far more consistent with the idea of an
active industrial policy – and therefore a mission-oriented green industrial policy
(see Mazzucato, this book) – than the UK’s policy paradigm. In the UK, govern -
ments since the 1970s have largely been sceptical of any directed form of industrial
policy, with the Treasury in particular a major opponent. More widely, many
comparative analyses of economic institutions placed emphasis on the much greater
degree of coordination among industrial companies and the state in Germany
compared with the UK (e.g. Hall and Soskice, 2001; Schmidt, 2002).
Other aspects of Germany’s institutions have also turned out to play important
roles in facilitating both the implementation of its renewable policy and in
increasing its net positive political feedback effects. Much of the investment by
non-corporate actors in renewables has been supported by state finance in the form
of the KfW bank, channelled through a network of local and regional banks which
know their clients personally. The UK has no equivalent financial institutions.
In Germany, higher energy costs for consumers have not produced quite the
same political backlash as in the UK, partly because higher levels of welfare and
lower inequality in Germany make fuel poverty and squeezed incomes in the middle
less acute problems (Crepaz 1998; Iversen and Soskice, 2006).
Below the level of national political economy, German federalism and decentralization has also meant that municipalism is strong, at least compared with the
UK’s currently highly centralized system. Both municipal and regional government in Germany have been highly supportive of various aspects of renew ables
growth, and many municipalities in Germany still own energy supply and generation businesses that have given them a vehicle for investment. In the UK, such
companies disappeared after the Second World War.
India and China
In the case of India and China, there are similarities as well as differences in
institutional context, which partly explains why they initially adopted similar
support policies for wind that focused on capital costs and directed subsidy towards
those institutions that play a leading role in their respective political economies –
state-owned enterprises in China and family-owned corporations in India (e.g.
Taylor and Nölke, 2008). Both countries have also historically embraced significant
state intervention on the economy (although China to a greater extent than India),
98 Matthew Lockwood
minded finance ministry was also opposed to a technology-specific feed-in tariff.
However, the wider German policy paradigm was more influenced by the concept
of ‘Ordoliberalism’, a social market approach developed in Germany after the Second
World War, which laid much greater emphasis on active government intervention
to ensure competition and prevent monopolistic or oligopolistic market power
(Toke and Lauber, 2007).
Ordoliberalism also turned out to be far more consistent with the idea of an
active industrial policy – and therefore a mission-oriented green industrial policy
(see Mazzucato, this book) – than the UK’s policy paradigm. In the UK, govern -
ments since the 1970s have largely been sceptical of any directed form of industrial
policy, with the Treasury in particular a major opponent. More widely, many
comparative analyses of economic institutions placed emphasis on the much greater
degree of coordination among industrial companies and the state in Germany
compared with the UK (e.g. Hall and Soskice, 2001; Schmidt, 2002).
Other aspects of Germany’s institutions have also turned out to play important
roles in facilitating both the implementation of its renewable policy and in
increasing its net positive political feedback effects. Much of the investment by
non-corporate actors in renewables has been supported by state finance in the form
of the KfW bank, channelled through a network of local and regional banks which
know their clients personally. The UK has no equivalent financial institutions.
In Germany, higher energy costs for consumers have not produced quite the
same political backlash as in the UK, partly because higher levels of welfare and
lower inequality in Germany make fuel poverty and squeezed incomes in the middle
less acute problems (Crepaz 1998; Iversen and Soskice, 2006).
Below the level of national political economy, German federalism and decentralization has also meant that municipalism is strong, at least compared with the
UK’s currently highly centralized system. Both municipal and regional government in Germany have been highly supportive of various aspects of renew ables
growth, and many municipalities in Germany still own energy supply and generation businesses that have given them a vehicle for investment. In the UK, such
companies disappeared after the Second World War.
India and China
In the case of India and China, there are similarities as well as differences in
institutional context, which partly explains why they initially adopted similar
support policies for wind that focused on capital costs and directed subsidy towards
those institutions that play a leading role in their respective political economies –
state-owned enterprises in China and family-owned corporations in India (e.g.
Taylor and Nölke, 2008). Both countries have also historically embraced significant
state intervention on the economy (although China to a greater extent than India),
98 Matthew Lockwood