European union crisis-induced institutional evolution. The effect of institutional entrepreneurship in the formation of EFSF

Abstract

ABSTRACT This paper conducts an in-depth case study of the 2010 Greek entrepreneurship attempts that led to the EFSF's creation, aiming to theorise crisis-induced institutional change in the EU. This research aims to cover the theoretical gap left by existing literature by combining theoretical elements derived from historical institutionalism and institutional entrepreneurship. Crises function as critical junctures. During critical junctures, the structural grip of path dependency loosens; thus, a multitude of paths forward are available. The choice of a specific path, if any, heavily relies on the concept of institutional entrepreneur. In 2010 the Greek government was such an agent, with interest in altering EU institutional design to overcome its financial ordeal and with direct access to the EU Council, the primary decision-making body regarding institutional change. The entrepreneur triggers a process of institutional change through their proposal. Once the entrepreneur chooses a path forward, this is further moulded by path dependencies.