From old to new industrial policy via economic regulation

Major institutional reforms that have introduced economic regulation in Europe and elsewhere appear to have ended traditional industrial policies of favouring selected national champion suppliers. Privatisation, the delegation of powers over mergers and acquisitions to the EU and independent competition authorities, new rules to ensure competition and prohibit state support to favoured companies and the end of planning, all appear to have led to a regulatory state. However, the article argues that regulatory reforms have in fact provided additional or alternative instruments for policy makers to favour European or international champion firms. The article analyses the different institutional reforms to show how they have provided instruments for policy makers to construct larger Europeanised and internationalised champion firms, shape markets through mergers and acquisitions, aid selected firms in liberalised markets, and to plan policies in ways that privilege chosen firms. It concludes that regulatory institutions are compatible with new forms industrial policy.