Shaky foundations: structural-relational power and business influence in the EU’s regulation of real estate finance

While the financialisation of real estate has emerged in political science as a critical dimension of Neoliberal restructuring of European economies, less attention has been given to its underlying regulatory conditions at the EU level and the role of corporate power in shaping them. This study fills the gap by using a Bayesian process tracing analysis to examine how corporate structural power, lobbying, and salience interact in the regulation of the EU insurance industry, and how this affects real estate investments and structured financial products. We advance and empirically test an explanatory mechanism to investigate the deployment of structural power as a critical lobbying resource for business groups in shaping policymakers’ understandings of regulation in different contexts of political salience. We collected and analysed legislative and documental sources, and conducted 20 interviews with
stakeholders and policymakers, related to the Solvency II and Institutions for Occupational Retirement Provision directives and their reforms from 2010 to 2022. Our findings demonstrate how the real estate finance industry secures its preferred outcomes when it leverages structural power through lobbying and is perceived by EU policymakers as credible and salient. Conversely, its efforts are only partially or largely unsuccessful when these conditions are unmet. This article refines the scholarly conceptualisation of the interactions among structural power, lobbying, and salience and sheds light on corporate power in EU real estate finance.