Industrial Policy and Sectoral Coordination: The Collapse of Germany’s Solar Industry

Timur Ergen
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Timur Ergen: Institute Labor and Economy (IAW), University of Bremen, Germany / Max‐Planck‐Institute for the Study of Societies, Germany

Politics and Governance, 2026, vol. 14

Abstract: This article contributes to the study of the practice of industrial policy by highlighting an underappreciated dimension in the existing literature: the role of sectoral coordination in policy implementation. Empirically, it traces the trajectory of green industrial policies for solar energy in Germany from the early 1990s into the 2010s. Drawing on policy documents, news coverage, industry reports, and secondary literature, the article shows how intra-sectoral conflicts undermined industrial policy implementation. While industrial policies successfully mobilized beneficiaries, they simultaneously undermined the sector’s capacity for coordination. The case study demonstrates how state support for renewable energy technology created a broad support coalition that, when facing international competition and domestic opposition, fragmented along supply chain divisions. This fragmentation locked the sector into a downward spiral of industrial decline, dependence on state assistance, and declining political legitimacy. The findings suggest that models of industrial policy focusing primarily on flows of state support may be insufficient. Doing industrial policy may depend equally on maintaining sectoral governance capabilities—including structures for supply chain coordination and mechanisms for collective voice.

Keywords: climate change; coordination; industrial policy; sectors; state capacity (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:cog:poango:v14:y:2026:a:11335

DOI: 10.17645/pag.11335

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