Laggards or Mavericks? Czechia and Hungary’s Divergent Responses to the EU's Changing Industrial Policy Regime

Ivo Iliev and Julia Rone
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Ivo Iliev: Faculty of Business Administration and Economics, University of Duisburg‐Essen, Germany
Julia Rone: Department of Political Science and Public Administration, Vrije Universiteit Amsterdam, The Netherlands

Politics and Governance, 2026, vol. 14

Abstract: There is widespread agreement among scholars that the “geo-dirigiste turn” in the EU and the resurgent spirit of industrial policymaking have thus far only served the interests of core countries, thereby reinforcing core–periphery dynamics on the continent. However, despite their shared semi-peripheral status in the transnational division of labour, Central and Eastern European states such as Czechia and Hungary have navigated the changing industrial policy paradigm of the EU in markedly different ways. While Hungary has doubled down on the pre-existing trajectory of attracting foreign direct investment in a few handpicked strategic sectors, Czechia has sought to branch out into green technologies, semiconductors, and horizontal support for R&D activities. Drawing on semi-structured interviews, self-collected quantitative data, and primary and secondary documents, we argue that such observable differences are predicated on differential patterns of state–business interaction. Two principal findings emerge. First, traditional accounts relying on state capacity as a master variable do not suffice to explain cross-national differences in industrial policymaking in the semi-periphery. The exercise of state capacity for industrial policy objectives varies depending on whether state capture is ubiquitous and politically driven or limited and driven by private interests. Second, our analysis shows that the Central and Eastern European countries, rather than playing the role of “laggard” policy adopters, tend to set their own priorities and “play their own game” as they become increasingly disenchanted with the structural dominance of core EU member state interests. More often than not, this subverts the shared objective of European strategic autonomy.

Keywords: Central and Eastern Europe; core–periphery relations; European Union; industrial policy (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:11379

DOI: 10.17645/pag.11379

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