Recharging Europe’s competitiveness: The case for a European Productivity Board

Abstract

Europe’s prolonged productivity slowdown poses a structural risk to growth, competitiveness and fiscal sustainability. In response, EU member states have created National Productivity Boards under European Council Recommendation 2016/C 349/01 to strengthen evidence-based policymaking. While National Productivity Boards provide valuable national analysis, no equivalent body exists at EU level to synthesise their findings or deliver independent scientific advice on productivity and competitiveness. Moreover, heterogeneous institutional designs, varying degrees of independence and fragmented methodologies limit cross-country comparability. Drawing on the literature on scientific policy advice, public choice and public administration, this article argues that independent advisory bodies could reduce short-term political bias, strengthen analytical capacity and improve the design of structural reforms. It therefore proposes establishing a European Productivity Board to integrate national analyses, harmonise data and methods, provide independent advice to the European Commission, monitor structural policies and report to the European Parliament, thereby strengthening coordination, transparency and long-term reform credibility.

Introduction: why Europe needs independent, scientific productivity advice

Europe is facing a profound productivity slowdown that threatens long-term competitiveness, economic growth and prosperity. Labour productivity growth has decelerated steadily over the past two decades, with large divergences across member states and persistent gaps relative to the US and parts of East Asia. This diagnosis has been forcefully reiterated in the recent Letta report on the single market (Letta 2024) and the Draghi report on competitiveness (Draghi 2024a; 2024b), both of which highlight structural fragmentation, chronically low investment, the weak diffusion of innovation and insufficient scale effects as problems.

A core theme emerging from this literature is that Europe is facing not only an economic problem but also a policy problem. Effective productivity policies require long-term commitment, cross-ministerial coordination, and analytical capacity that is often not available within political or administrative cycles at either the national or the European levels. This is where independent, scientifically grounded economic policy advice becomes indispensable.

Research across political economy and public policy has repeatedly shown that independent scientific advisory bodies enhance the quality of policymaking. Papenfuß and Thomas (2007, 338–45) demonstrate that advisory institutions perform essential functions, ranging from early diagnosis of structural trends to the translation of scientific evidence into actionable policy recommendations. Their analysis highlights that independence, methodological consistency and the clear division of advisory functions significantly increase the credibility and effectiveness of economic governance.

Moreover, evidence from public choice theory suggests that policymakers and bureaucracies often have status-quo biases and face electoral or organisational incentives that inhibit reform adoption, particularly when it comes to structural reforms with long-term effects rather than short-term policy measures with payoffs within the legislative period (Drazen and Eslava 2010, 52; Nordhaus 1975, 187–8). This tendency becomes evident when it comes, for instance, to reforms of the pension system, long-term fiscal sustainability, environmental sustainability, or structural reforms to foster long-term productivity growth and competitiveness. In addition, Thomas et al. (2017, 176–7) show that risk preferences in administrative institutions can reduce the probability of implementing productivity-enhancing reforms.

Independent scientific advice institutions can therefore serve as a corrective mechanism by injecting long-term perspectives into short-term political environments. This finding aligns with empirical research on the influence of economists on policymaking. Haucap et al. (2015) document that economic expertise has measurable effects on public debate and policy orientation, especially when advisory bodies combine independence with high visibility and transparent communication.

Against this backdrop, the National Productivity Boards (NPBs) established as the result of a European Council recommendation (European Council 2016) constitute an important step towards strengthening evidence-based policymaking by providing national-level analyses of productivity, competitiveness and structural reforms. From a European perspective, however, the institutional framework remains incomplete, as no body aggregates NPBs’ findings; offers independent, EU-wide scientific advice to the European Commission and the Competitiveness Council; or monitors policy performance for the European Parliament. This article therefore argues for the creation of a European Productivity Board (EPB): an independent advisory body that would synthesise national analyses, develop comparative EU-level assessments and reform recommendations, strengthen policy coordination and help harmonise analytical methodologies across NPBs.

The remainder of this article is structured as follows. In the following section we review the functions, institutional design, independence and effectiveness of scientific economic policy advice, drawing on a broad literature from economics, political science and public administration. Thereafter, we provide a detailed assessment of the status quo of NPBs. We continue by outlining the institutional rationale for and concrete design of the proposed an EPB. The article concludes with some final considerations.

Scientific economic policy advice: functions, institutional design, target audiences, independence and effectiveness

Functions of scientific policy advice

Scientific economic policy advice fulfils several distinct functions that shape how expert knowledge enters policymaking. Drawing on Papenfuß and Thomas (2007, 338–45), five core functions can be distinguished. First, the operative advisory function provides policymakers with timely, implementable guidance. This requires close integration with government processes, enabling advisers to respond quickly and to filter out inefficient or counterproductive proposals—an aspect linked to what Radaelli (2009) describes as the institutional preconditions for effective evidence use. Second, the conception function involves the development of long-term, theory-based policy frameworks. It benefits from institutional independence and analytical continuity, allowing advisory bodies to deliver durable orientations not bound by short political cycles. As Dunlop and Radaelli (2013) note, such long-horizon analytical work is critical for genuine policy learning. Third, the information function aims to inform the public and enhance transparency. Effective communication is essential for translating complex analysis into accessible narratives. Research by Haucap and Thomas (2014) and Haucap et al. (2015) shows that advisory bodies have greater impact when they actively engage in public communication and contribute to a well-informed societal debate. Fourth, the legitimisation function refers to the political use of expert assessments to justify or support policy decisions. While normatively contested, this function plays a notable role in practice and depends strongly on the perceived neutrality and credibility of the advisory institution. Finally, the filter function screens out economically flawed proposals at an early stage. It requires close interaction with policymakers and procedural integration—attributes more typical of advisory bodies located within or near the executive.

These functions highlight that economic policy advice serves multiple purposes that may result in institutional trade-offs. As Papenfuß and Thomas (2007, 343–5) demonstrate in their comparative analysis of advisory bodies, the various functions of scientific policy advice are associated with distinct institutional requirements. Close proximity to governmental decision-making may enhance the operative and filter functions, but can weaken perceived independence and credibility in fulfilling the information and legitimisation functions. Conversely, strong institutional independence may strengthen long-term conception and public communication, while limiting immediate operative advisory capacity vis-à-vis policymakers. Hence, no single institution can perform all functions of scientific policy advice equally well, underscoring the importance of aligning institutional design with the specific advisory functions an institution is expected to fulfil.

Institutional design

The institutional design of advisory bodies significantly affects their effectiveness. There is a wide spectrum of arrangements in Europe, ranging from independent councils, such as Germany’s Council of Economic Experts (Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung), to planning agencies such as the Netherlands’ Bureau for Economic Policy Analysis (Centraal Planbureau) and advisory boards embedded within ministries. Legal anchoring ensures stability and protects against short-term political pressures (Majone 1996), while a clearly defined mandate avoids dilution of focus. Access to comprehensive data and advanced modelling capacities strengthens analytical output (Egeberg 2014; OECD 2025). Transparent appointment procedures improve legitimacy and public trust, and publishing autonomy is a prerequisite for credibility. Together, these elements establish the authority and independence necessary for high-impact scientific advisory work.

Target audiences

Scientific advice is aimed at multiple audiences: the targets for direct policy advice are governments and ministries, which rely on expert analysis to inform reforms and budgetary decisions, as well as parliaments as legislators on the national level. On the EU level, European institutions, such as the European Commission, Council and Parliament, use this information in European policymaking. In addition, social partners— such as trade unions and business associations—and other stakeholders are audiences that are crucial to ensuring policy uptake. Of particular importance is the broader public and media debate, as science-based information enables the electorate to make informed decisions as voters. In this vein, Haucap et al. (2015) show that advisory bodies have greater impact when they are highly visible in the media and their analyses are actively disseminated and accessible.

Independence

Independence is central to the quality and credibility of scientific policy advice. Organisational independence shields advisory bodies from direct political interference and from special interest groups, while financial autonomy ensures operational continuity. Full rights to publish reports without prior approval, combined with transparent appointment procedures, safeguard impartiality. The European Commission (García et al. 2023; 2024) highlights substantial variation in independence across the NPBs, affecting both their credibility and policy influence.

Effectiveness

Effectiveness is multidimensional, encompassing output legitimacy, throughput legitimacy and outcome legitimacy. Output legitimacy relates to methodological rigour, throughput legitimacy reflects transparent procedures and outcome legitimacy captures the actual influence of recommendations on policy decisions. Advisory bodies are most effective when analyses are of high quality, communication is proactive, independence is guaranteed, and recommendations align with political incentives or generate awareness of the need for reform via public debate (Haucap et al. 2014; Papenfuß and Thomas 2007, 353–4).

The case for an EPB

NPBs: strengths and gaps

Across the member states, NPBs provide high-quality analyses of the key drivers of productivity and international competitiveness, including labour markets, innovation, digitalisation, industrial dynamics and energy costs, as demonstrated by the comprehensive productivity reports published by, for example, Austria (Austrian Productivity Board 2024), the Netherlands (CPB Netherlands Bureau for Economic Policy Analysis 2024), France (National Productivity Board of France 2023), Germany (German Council of Economic Experts 2024) and, more recently, Italy (Italy, National Council for Economics and Labour 2025). An assessment by the European Commission (García et al. 2024) finds that while NPBs have strengthened evidence-based policy debate, their impact on productivity-enhancing reforms remains limited due to structural and operational weaknesses. These include incomplete coverage across member states, wide variations in autonomy and resources, insufficient legal guarantees of independence, unstable funding, limited policy involvement beyond annual reporting, weak access to data and low public visibility.

Beyond these national constraints, the effectiveness of NPBs is further limited by the European nature of many of the competitiveness challenges they identify. Key bottlenecks—such as energy market fragmentation, inadequate cross-border infrastructure, incomplete capital and digital market integration, and inefficient allocation of research and innovation funding—cannot be effectively addressed through national policies alone. As highlighted in the Draghi report on competitiveness (Draghi 2024a; 2024b), Europe’s productivity gap increasingly reflects EU-wide coordination failures in market integration, infrastructure investment and the strategic prioritisation of research spending. Yet, no institutional mechanism exists to aggregate NPB findings, assess their EU-level implications or translate national evidence into coherent European policy guidance. As a result, valuable insights remain fragmented, weakening both the impact of NPBs and the effectiveness of EU policymaking in areas central to productivity and competitiveness.

Draghi’s warning: the increasing ineffectiveness of European Commission policies

The Draghi report on competitiveness (Draghi 2024a; 2024b) and his 2025 follow-up speech (Draghi 2025a) criticised the European Commission for its sluggish pace in implementing reforms, regulatory uncertainty and lack of strategic coherence. Draghi emphasised his disappointment with ‘how slowly the EU moves’, noting that bureaucratic inertia is often disguised as respect for legal processes, in what he referred to as ‘complacency’ (Draghi 2025a, 2). He highlighted that the Commission has failed to match the speed of global competitors, leaving citizens frustrated. Regulatory frameworks, notably the AI Act (European Parliament and Council 2024), were singled out as sources of uncertainty that hinder innovation. Similarly, the General Data Protection Regulation (European Parliament and Council 2016) imposes compliance costs that are about 20% higher than in the US, creating a competitive disadvantage for European firms. Draghi (2025b) also faulted the Commission for under-utilising existing instruments such as the Important Projects of Common European Interest, despite massive state aid allocations, and for perpetuating the illusion of a geopolitically influential EU despite the lack of a unified strategy, relying instead on fragmented national efforts.

To address these shortcomings, Draghi called for faster decision-making and streamlined governance to reduce bureaucratic delays that undermine competitiveness. He urged greater regulatory clarity and simplification, including a reassessment of the AI Act and the General Data Protection Regulation to ensure that they support rather than hinder innovation. Draghi also advocated more effective use of existing EU instruments, such as the Important Projects of Common European Interest, to focus resources on strategic sectors including digital technologies, energy and defence, alongside a coherent EU-level industrial and geopolitical strategy. Ultimately, he argued that Europe must match speed with ambition by simplifying rules, investing in innovation and skills, and fully leveraging its collective strength in the rapidly changing global environment. These recommendations were aimed particularly at EU-level policymaking.

In a recent essay, Garicano (2025) sheds some light on the reasons why European Commission policy has become increasingly ineffective. He highlights a fundamental misalignment of incentives within EU governance. Because the Commission’s influence, resources and legitimacy are tied to legislative output rather than policy outcomes, it faces little institutional reward for restraint, simplification or learning from failure. Informal trilogue practices further amplify this bias by concentrating drafting power in the Commission’s hands while compressing deliberation, weakening parliamentary scrutiny and exploiting the Council Presidency’s short-term incentives to close deals. In this environment, policies are optimised for adoption rather than effectiveness: complex compromises are rushed through under time pressure, distributional and implementation concerns are inadequately assessed, and cumulative regulatory burdens go largely unmeasured. The absence of robust, independent ex post evaluation and aggregate impact assessment means that policy failure rarely triggers correction but instead generates additional regulation. Ineffective policies are therefore not an anomaly but the predictable outcome of a system that systematically privileges legislative production over evidence-based policy design, implementation quality and long-term economic performance.

An EPB: concept, design and expected impact

The limitations outlined in the previous section point to the need for an EPB that complements national boards by aggregating their analyses, harmonising methodologies, and providing independent scientific guidance on EU-level productivity and competitiveness policies. An EPB could act as an independent scientific body that provides EU-wide advice on productivity and competitiveness to the European Commission, monitors the design and implementation of EU structural policies, and reports its findings to the European Parliament. In addition, by linking national diagnoses with European policy coordination and legislation, an EPB could utilise the findings of the NPBs to better align national and EU responses to Europe’s shared productivity challenges.

Concept and mandate

Europe’s persistent productivity challenges arise from structural and transnational factors, including digitalisation, global value chains, technological diffusion and the green transition (Draghi 2024a, 2024b; Letta 2024). While NPBs have contributed significantly at the national level in many member states, there is currently no mechanism to aggregate insights or utilise them on an EU level (García et al. 2024). An EPB would fill this gap, synthesising analyses from national boards while producing EU-level assessments of productivity trends, structural bottlenecks and competitiveness drivers. Hence, it would provide important scientific policy advice for the creation of evidence-based European economic policy (Majone 1996; Papenfuß and Thomas 2007, 353–4).

Institutional design

The EPB could be a dedicated independent agency or a complementary body linked to existing structures, such as the European Fiscal Board (García et al. 2023). A committee composed of European scientific experts acting in a personal capacity for fixed terms (e.g. of four or five years), supported by a permanent analytical secretariat, would ensure methodological rigour and continuity. Clear governance rules, transparent appointment procedures, financial autonomy, unrestricted publication rights and membership limited to independent experts with recognised scientific credentials—rather than representatives of governments, interest groups or political institutions—would safeguard independence and credibility (European Parliament and Council 2023; Papenfuß and Thomas 2007, 338–45).

Institutional embedding

An EPB could be institutionally modelled on the NPBs in several member states, where these bodies advise the government as independent experts while formally reporting to parliament, thereby strengthening democratic accountability. In such settings, governments can draw on state-of-the-art policy advice, while parliaments are equipped with authoritative, independent analysis to scrutinise the government’s policy choices, assess implementation and hold the executive accountable for outcomes. Transposing this logic to the EU level, an EPB would provide scientific advice to the European Commission on productivity and competitiveness while also reporting its assessments to the European Parliament, thus enabling legislators to evaluate whether EU policies are well designed, coherent and effective. This design would clearly distinguish an EPB from internal Commission advisory structures, such as the chief economists’ offices or the analytical work of the Joint Research Centre, which are embedded within the policymaking apparatus and ultimately subordinate to the Commission’s priorities. By remaining institutionally independent from policy formulation and legislative drafting, an EPB could offer unbiased ex ante advice, conduct rigorous ex post evaluations and monitor implementation without conflicts of interest. Such an arrangement would enhance transparency, improve policy learning and strengthen the Parliament’s capacity to hold the Commission accountable, thereby reinforcing evidence-based governance and long-term productivity-oriented policymaking at the European level.

Based on the existing network, an EPB would deepen the coordination of methodologies, provide a conduit for data exchange and share thematic research with the NPBs. This advanced networked approach would reinforce both national and EU policymaking, enabling mutual learning and facilitating the diffusion of effective reforms (Pochet 2016). Active communication with policymakers, social partners, other stakeholders and the public would enhance transparency and legitimacy (Dunlop and Radaelli 2013; Haucap and Thomas 2014). This would be particularly relevant for cross-country topics such as energy prices and related issues that spring from the lack of integration in EU energy markets.

Expected impact

An EPB would provide independent, comparable EU-wide scientific analyses, improve the quality of structural reform recommendations, and reduce fragmentation in analytical approaches and policy advice (García et al. 2024). Harmonised methodologies would enable cross-country comparisons and the dissemination of best practices. Greater visibility and public communication would support informed debate, ultimately contributing to the more effective reform implementation, higher growth, improved competitiveness, and greater economic and social sustainability demanded by the Draghi and Letta reports.

Conclusion

Europe faces persistent challenges in productivity growth and competitiveness which threaten long-term economic prosperity. NPBs have emerged as important instruments to provide independent, evidence-based policy advice, enabling governments to adopt structural reforms informed by rigorous analysis (García et al. 2023; Papenfuß and Thomas 2007, 338–45). However, to date there is no body that aggregates the findings of the NPBs at the EU level or provides independent EU-wide scientific advice on productivity and competitiveness. In addition, the NPBs contribute significantly to policymaking by offering analytical expertise, monitoring structural trends and enhancing public debate (García et al. 2024). However, heterogeneity in their institutional design, methodological approaches, independence and visibility limits their comparative effectiveness and constrains EU-wide learning (García et al. 2024).

An EPB would address these gaps by collecting and synthesising insights from the NPBs and providing scientific and independent policy advice on productivity and competitiveness at the EU level. In addition, an EPB would foster the harmonisation of methodologies and, by doing so, would improve the quality of structural reform advice, enabling meaningful benchmarking and supporting coordinated policymaking across the member states and on the EU level (García et al. 2024; Pochet 2016, 296). Moreover, by enhancing communication and public engagement, an EPB would increase transparency, legitimacy and the likelihood of reform uptake.

In summary, the establishment of an EPB would represent a logical and timely step towards producing more effective, evidence-based scientific policy advice on productivity- and competitiveness-related policies in the EU. By integrating national insights and providing scientific guidance at the European level, an EPB would strengthen the Union’s capacity to foster growth, competitiveness and sustainable prosperity across all its member states.