Liberalism and Mercantilism in the Contradictory European Developmental State

There is a fundamental contradiction in the policies pursued by the European Union. On the one hand, it pursues neoliberal policies of deregulation and reregulation to create more integrated markets in Europe. On the other hand, it supports firms, regions and individuals to become competitive on a global scale. The underlying strategies are almost the opposites of each other, increasing competition between firms or increasing collaboration among firms and state (the EU). 

In the recently launched economic strategy called EU2020, the concept of an innovative union plays a leading role. It is an interesting policy where the EU is building up a greater role for itself in supporting European firms. It builds on programs for technological development which have been part of the EU ever since the Euratom treaty, parallel to the Rome treaty.

The concept of a developmental state has been used to describe policies to promote the development and competitiveness of firms, not only in South East Asia but also in the US. I want to test the applicability of this concept to the policies of the EU. I also want to investigate the thinking behind the policies and the working elements of the policies to see if the European Union can play the role of a developmental state. The policies can be thought of as a pragmatic response to globalization and market failure. However, to produce the desired outcomes there has to be a feedback mechanism, a kind of policy learning and a learning subject.