The Impact of EU Association on Industrial Policy Making
Campbell, Carolyn, East European Quarterly
All in all, the period after 1990 is characterized by various changes in the structure of the Polish economy, which are sometimes quite dramatic and which proceed in diffrent directions. Still, these changes were not, to any extent, a result of the industrial policy understood as a deliberate influence on the structure of production exerted by the Government. On the contrary, the Government declared very early that it did not intend to conduct such policy. There is well known in Poland an official statement made by the then Minister of Industry: `Our industrial policy is the lack of industrial policy'.
Marek Belka and Stefan Krajewski Industrial Policy in Poland (1996) (1)
This article explores the effects of EU association on industrial policy making in the new Poland. As the country struggled to rebuild, it set its sights on the EU, allowing the goal of EU membership to bolster the conversion from socialism to capitalism. Despite occasional digressions, the commitment to EU association prevailed over attempts to develop active industrial policies and successive Governments were able to stay a pro-market, pro-EU course in the face of demands for intervention. As case studies this article examines two key Polish industrial sectors, textiles and steel, both of which were important sectors under central planning and both of which were designated as "sensitive" sectors in the association negotiations. While the textiles sector adjusted relatively well to the new economic environment, the steel sector adjusted relatively poorly, complicating the Government's struggle to liberalize the sector. These case studies reveal that even where domestic opposition to reform was strong (e.g., in sectors facing high social costs), government leaders were able to preserve their autonomy domestically using the "shield" of mandatory harmonization with EU policies.
Formerly confined within the Soviet bloc for over four decades, the newly opened Poland underwent an industrial policy-making revolution during a period wrought with dilemmas - the difficult task of converting from a socialist system to a market economy and the ongoing struggle to consolidate a fledgling democratic political system. As Polish policy makers liberalized industrial trade under the Association Agreement, they relinquished direct control over industry through privatization and market-based reforms. This extrication of policy makers from industry was facilitated by the lack of a well-defined post-communist system of lobbying or interest group organization through which to consolidate opposition. The Government resisted domestic pressures for intervention in line with the Association Agreement, revealing that a country in transition and seeking membership may be more predisposed than other recent EU member states to abide by the policy-making constraints of the EU in return for greater chances of membership.
THE EU AS POLICY-MAKING SHIELD
The theory of "liberal intergovernmentalism," which asserts that membership in the EU strengthens the "national executive" vis-a-vis other domestic actors, provides a valuable framework for exploring the influence of EU association on industrial policy making in Poland. According to the theory, cooperation at the supranational level in the EU redistributes "domestic power resources" between the government and society in favor of a discrete executive, meaning not only the head of state or government or highest political authority in a particular issue area, but those policy makers who participate directly in international negotiations and institutions (Moravcsik 1994). (2) By conferring domestic "agenda control," policy coordination among EU member states allows national executives to determine which issues receive attention and to veto proposals that conflict with external agreements. Whereas other theories assert that international cooperation weakens national executives ("ties their hands"), (3) liberal intergovernmentalism contends that it empowers them and allows them to relax domestic constraints ("cut slack") imposed by legislatures, interest groups and other societal actors, particularly where domestic opposition is weak. …