Where are Europe’s YIMBYs?

It is generally known that the US has much higher levels of charitable spending. Harvard’s endowment reached $53 billion in 2024; the combined colleges of Oxford hold less than $10 billion. Mayo Clinic, an American hospital, raised over $3.8 billion in a single fundraising campaign. Americans give more to museums, foreign aid, churches, and political parties.

But this gap also extends to funding for new ideas. Donor money goes to think tanks, grants, educational programs, and fellowships, which provide the ideas and labour to operate government.

Last week, the Dutch government announced they were freezing the rents of ‘affordable housing’ nationwide for two years. This will crush new construction. Bad housing policy is not uncommon in Europe. What is surprising is the absence of pro-housing groups (the ‘YIMBYs’) who push back against it. The coalition of wonks that has been pushing for much greater market-rate construction in America, Canada, and the UK is absent. The housing debate — as are many other issues — is left to political parties, the press, and industry groups.

Some of this is demand-side: greater state capacity means that a lot of policy work takes place within governments. You could point to scale as an explanation – the US aggregates the talent of 340 million in a way Europe does not that of 450 million. But for similarly sized political units (US states compared to member states), there is still a much greater intensity of non-governmental policy work in America. An underrated problem for Europe is a lack of philanthropy makes policy debates much worse than they otherwise should be.

If I wanted to write a story about zoning in Massachusetts, I could find a plethora of think tank reports. If you’d like to know what the Dutch policy is for data centers (banned over 60 megawatts in almost the entire country), the only way to do so is to actually read the statutes.

The Brookings Institution, probably D.C.’s most famous think tank, holds assets of $550 million and covers more than four‑fifths of its operating costs with private gifts and grants.​ Bruegel, the largest Brussels think tank, has assets of €6.1 million, 70% of which comes from government and corporate membership fees capped at €50,000 per donor.

Many interesting ideas are only possible due to funding from private donors. My ability to work on this blog was funded by American philanthropy. I recently got to attend the conference of the program behind that grant. The recipients were global — Ukrainians students, Indian founders, British think tankers, a Mexican podcaster — but the funding was American.

The pro-housing groups that are scoring increasing wins in the US and the UK owe their resources to private funders. Few policy victories are entirely monocausal, but in housing it has been the wonks who have driven change.

European countries commonly have a system where the government funds ‘scientific institutes’ to support political parties. These foundations lack independence and thus have not produced much work of note. Philanthropic rivalry overseas supports much more ideological diversity: donors bankroll progressives (e.g., Roosevelt Institute), libertarians (Cato), conservatives (Heritage), and technocratic centrists (Brookings).

In general, many inventive solutions do not come from ministries. California’s most successful housing policy in the last decade — permitting the construction of ADUs (accessory dwelling units – additional housing on an existing single-family plot) — originated in the housing policy groups. The minister does not know what he does not know, and the bureaucrat usually does not supply what the minister does not ask.

We find it intuitive that the government is not good at supplying consumer product. A lack of competition means there was no reward for providing those goods well, and no mechanism through which resources are allocated to those who are most productive. The same is true for ideas — the in-house think tank of the Dutch Ministry of Housing does not need to be good at its job to continue existing.

It leads to persistent misallocation of funds: it recently came out that some of the major NGOs supporting the climate efforts of the European Commission were, in fact, funded by the European Commission.

The far-right and far-left groups that have an outsized influence in American politics are also donor-funded. But in exchange there is a policy debate that takes place in public, and that local governments and parliamentarians are equipped with more options.

This is a US-EU gap that it is the consequence of private, not governmental, actions. European regulations do not prevent their citizens from funding groups that generate ideas and campaign for policies. They simply choose not to.

The European rich do get taxed at much higher rates, and tax incentives differ. U.S. federal law lets individuals deduct gifts up to 60 percent of taxable income; bequests to charity escape estate tax altogether. The United States also has more ultra‑high‑net‑worth households per capita, who supply close to 40 percent of individual giving.​ But even adjusted for that, Europeans give much less. On the common metric “individual donations as a share of GDP,” a report by the Charity Aid Foundation shows the United States at 1.44 percent, the United Kingdom at 0.54 percent, the Netherlands and Italy at  0.30 percent, and France at  0.11.

Note Tocqueville: 'As soon as several of the inhabitants of the United States have taken up an opinion or a feeling which they wish to promote in the world, they look out for mutual assistance; and as soon as they have found each other out, they combine.’

It may be declining elsewhere, but the American culture of association persists in the supply of funding for policy.

Ideas are fortunately not restricted to one geography. Yesterday, D66, the primary Dutch centrist party, proposed an emergency package to deal with housing shortages. The proposals will not be surprising to any wonk from the English-speaking world: the right to start construction while complainants are appealing permits (rather than after), and a limit on how many cases can be appealed to the higher courts.

While the funding for groups is local, their impact is not. As long as Europe’s rich remain uninterested in policy, many new ideas will probably be imported rather than created.