Progress Over Promises

Industrial policy is once again a European policy priority. Governments need to commit large sums of public money to bridge the investment gap for the green transition and build Europe’s long-term competitiveness, resilience, and sustainability.

This brings a much-discussed problem back in focus: how to ensure that companies benefitting from direct public support actually deliver the desired – and promised – outcomes?

Common practice is to attach upfront conditions to public benefits. But too often these conditionalities are tied to promises instead of actual progress.

We therefore propose another approach to conditionalities: the Progress-Dependent Principle (PDP).

Through its three core components, a progress-dependent conditionality regime can direct public support to the private sector in a more effective and efficient way:

1. Binding progress targets – turning productive, social, or environmental public priorities into mandatory goals
2. Performance-based incentives – granting support based on achieved outcomes instead of big promises
3. Open and fair access to direct support – ensured by equal treatment and the widest possible availability to potential beneficiaries.

This report describes in detail the rationale and vision of the Progress-Dependent Principle, and a practical framework for its implementation.