When do states disrupt industries? Electric cars and the politics of innovation

Abstract

When do states forge technological change in mature industries? This article challenges the emphasis on bureaucratic autonomy in explaining the ability of governments to promote technological change. We show that structural features of the bureaucracy alone are insufficient to account for variation in policy intervention, and argue that sectoral patterns of interest intermediation shape state capacity. Political coordination leads industry and government to broker technological transformations in consensus-driven negotiations. This prioritizes the interests of incumbent firms, likely resulting in regulatory capture and weak policy intervention. Political competition among interest groups and state agencies, by contrast, allows policy-makers to organize coalitions of technology challengers, likely leading to strong policy intervention. We examine this argument in the case of electric vehicle policy in Germany and the United States. Germany failed to disrupt its auto sector to transition to electric vehicles, while the United States adopted comprehensive policies for the manufacturing and commercialization of electric cars against incumbent opposition. Counter to conventional wisdom, our findings suggest that states can effectively engage in sectoral intervention to drive technological change in the absence of autonomous bureaucracies.

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