Jasmina Božić, Ivan Šprajc, Armano Srbljinović | Journal of Co-operative Organization and Management
European integration has reshaped the space for domestic industrial policies, foreclosing protectionist strategies, and instead promoting liberal industrial policies aimed at creating an integrated and competitive European market. Such Europeanisation proceeded further in East European states, which display more transnationalised growth models and rely on EU compliant industrial policies more than the West. The paper argues that the EU enlargement strategy played a key role in this Europeanisation, through a combination of conditionality, financial assistance and institution building. The EU helped tilt the domestic political balance in favour of development strategies based upon foreign direct investment (FDI) and it increased the capacities of East European states to use generous and EU compliant state aid as a key industrial policy tool. The resulting economic transnationalization locked-in policy transformation. While rising economic nationalism challenges such transnationalization at the margins, the core of East European growth models and industrial policies persist years after accession.