Beyond Market Faith: Determinants of Governmental Intervention Timing During the European Energy Crisis

The European energy crisis, triggered by Russia's invasion of Ukraine, prompted unprecedented governmental interventions across Europe. This study examines the factors that influenced the timing of national fiscal responses, challenging traditional assumptions about when governments choose to intervene in energy markets. Using survival analysis techniques on Bruegel's comprehensive "National fiscal policy responses to the energy crisis" dataset, the paper investigates how structural factors shaped intervention speed across states. I test whether governance capacity, prior institutional arrangements regarding state intervention, energy dependency profiles, ideological preferences, and societal characteristics influenced how quickly governments abandoned market-based solutions in favor of direct fiscal measures or price caps. Beside the monthly timing, the level of expenditure will be tested via OLS regression. Conventional wisdom suggests governments with stronger market orientations and higher governance capacity would resist intervention, preferring market solutions to work independently. However, preliminary evidence suggests more complex dynamics at play. This research contributes to the understanding of crisis governance by illuminating when governments overcome ideological resistance to market intervention during acute economic emergencies. The findings have important implications for predicting governmental responses to future energy market disruptions and for understanding the conditions under which even the most market-oriented administrations will employ interventionist policies.