Choosing Not to Experiment: Regulatory Sandbox Adoption and Policy Instrument Choice in Europe

Regulatory sandboxes are widely read as signals of innovation-friendly financial regulation and as evidence of regulatory modernity. Yet only eleven of thirty EU and EEA jurisdictions operate one. This paper treats the European FinTech sandbox map as a problem of policy instrument choice rather than as a mere measure of innovation friendliness. Because initiatives bearing the sandbox label differ widely, the analysis separates supervised live-testing sandboxes from advisory programmes, statutory exemptions, and innovation hubs, and applies a crisp-set Qualitative Comparative Analysis to thirty EU/EEA countries, complemented by case evidence on the decisive contrasts. No condition is close to necessary or sufficient for adoption. Latvia and Lithuania form the only repeated adopter profile, and six of the eleven adopters share their measured profile with non-adopters. Non-adoption follows a clearer institutional logic, in which established alternative facilitation tools, or the absence of supporting administrative conditions, accompany the decision not to sandbox.