6 February 2024

Poor policymaking has significantly contributed to Europe’s challenges across various fields. Despite politicians’ professed commitment to evidence-based policymaking, the paper highlights how decisions are infected by populism and short-termism.

The failure of energy policy has become apparent in skyrocketing bills since the Russian invasion of Ukraine. Chapter 1 outlines how policies like windfall taxes, green industrial strategies, and energy price caps harm efforts to produce more energy.  The report argues for a simplified, less burdensome approach, including liberalising energy markets, removing barriers to competition such as price controls, getting rid of subsidies, and even privatising or breaking up state-controlled monopolies. The chapter also outlines how carbon pricing, which nudges markets towards lower-carbon energy production, should be used to address climate change instead of green industrial policies.

Chapter 2 highlights the failure of prohibitionist drug and nicotine policies. It reviews how bans, regulation, and over-taxation have fuelled organised violent crime and corruption, increased pressure on criminal justice systems, and been financially costly for governments. The authors recommend a ‘harm reduction’ approach highlighting the UK’s successful previous approach to vaping and the Netherlands’ and Portugal’s effective drug decriminalisation policies.

Chapter 3 addresses the difficulties of European pension systems because of ageing populations and mounting debts. The paper reveals a shortfall in European pension contributions relative to the total cost. The gap, estimated at 5.6% of the EU’s GDP, or €823 billion, in 2021, and is only likely to grow, making it imperative for policymakers to proactively reform pension systems as they become unsustainable.

Chapter 4 finally highlights the failure to follow the evidence in agricultural policy, epitomised by inefficient state studies and overregulation of innovations like genetically modified organisms (GMOs). A more evidence-based approach could increase efficiencies and lower consumer food prices.