Policy Innovations and the Challenge of “Greening” the Fiscal State

Leon Wansleben

To implement the sizable reductions in greenhouse gas emissions that are needed to achieve their “net zero” objectives, states need to fundamentally remodel their fiscal and social policies. “Greening” the fiscal state requires deep reforms, such as imposing a comprehensive carbon tax, shifting relative prices, redesigning subsidies, and mobilizing massive resources for infrastructure investment. This in turn presupposes interventions into existing fiscal relations, which raises some profound distributional questions. How do different state structures and cultures respond to a momentous challenge that is comparable to the adoption of social and macroeconomic policies during the early to mid-twentieth century? Following a tradition of state-centric research in political sociology, this project looks at bureaucratic organizations, their linkage with party politics, their internal change, and their role in policy innovations to understand to what extent, and how, different states manage to “green” their fiscal policies. The project draws on historical institutionalism and organizational sociology to study processes of failed and accomplished reforms, their enabling conditions, and obstacles to them, in Germany and Great Britain.