Ideational agency and economic policymaking: Ideas, politics, and change in European Political Economy

This paper critically examines the role of ideas in economic policymaking, focusing on the concept of ideational agency within the field of European Political Economy (EPE). It highlights a paradox in the ideational literature: while early scholarship emphasized the transformative power of ideas in driving policy change, more recent studies have focused on their stabilizing effects as ideas become institutionalized. By analyzing key scholarly contributions and presenting a case study on the evolution of monetary policy in the eurozone, the paper identifies the limitations of frameworks that attribute policy shifts solely to crisis-induced learning or actors’ creativity. Instead, the analysis underscores the pivotal role of political dynamics in enabling ideational agency and the emergence of transformative ideas. The case of the European Central Bank (ECB) illustrates this argument, showing how the institution’s departure from monetary orthodoxy – through quantitative easing and climate-focused policies – was facilitated by political support from eurozone governments and shifting public opinion. These factors provided the legitimacy and leverage needed for the ECB to exercise ideational agency, mobilizing and institutionalizing new ideas that exerted causal influence on policy trajectories. The findings call for a deeper integration of political dimensions into the study of ideational change, offering new insights into how ideas interact with institutional and societal dynamics to shape economic policymaking.