Under its umbrella, the European Union covers countries with highly diverse configurations of capitalist political-economic institutions. In the macro-level political economy literature these differences have led scholars to generate a number of hypotheses about the relative gains or losses of individual member countries from important institutional innovations that advance integration, such as the formation of the European Central Bank and a common currency (cf. Hall and Franzese 1998; Iversen 1998). Moreover, individual citizens and labor market participants may perceive costs and benefits differently, contingent upon national wage-bargaining systems or welfare state policies. Domestic political divides between advocates and opponents of EU integration may play out differently and yield contrasting partisan alignments if polities are embedded in different institutional “varieties” of capitalism.

In this chapter, we explore how the diversity of capitalist institutions affects political contestation over EU integration in two respects. First, capitalist institutions affect the proportion of voters in each country who have an incentive to challenge EU integration. In other words, political economy shapes the “grievance level” that may provide the raw material of patterns of domestic contestation. Contingent upon existing national economic institutions, citizens calculate how their benefits (in terms of jobs, income growth, etc.) are likely to be affected collectively for most voters (“sociotropic” calculations). Second, they also may focus on their potential individual benefits and costs that result from changes in the expected economic payoffs induced by the consequences of European integration for national political-economic institutions.