Abstract
This research provides the political economy explanations for higher education policy reform in the region Europe in the initial decades of the 21st century. The concept of a Europe of Knowledge and the pursuit of global competitiveness in the knowledge economy set the context for the intergovernmental initiative of the Bologna Process that created the EHEA (European Higher Education Area). Growing from 29 originally to 47 participating countries in 2013, there are various political economy explanations that consider the incentives and barriers to reach criteria to participate in the EHEA. With the focus on the national level of policy implementation, institutional change is considered in relationship to broader trends in economic development and globalization. The political economy is the independent variable, and the policy implementation of the EHEA criteria is the dependent variable. With a multi-method approach the research uses quantitative analysis and qualitative analysis to compare the case studies of Portugal and Spain. Theoretical perspectives are rational institutionalism to describe the motivations of the state in liberal intergovernmentalism and sociological institutionalism to describe the normative influences of the European Union in shaping domestic policy aligned with the concept of Europeanization. These are taken together in a historical institutional perspective that considers domestic and international political economy pressures on policy coordination.