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France: Whither Indicative Planning?

France: Whither Indicative Planning?. The country of paradoxes (dirigisme a la Colbert and laissez faire) centrism and regionalism, socialism and nationalism, mercantilism and protectionism The revolutionary tradition The country of –isms The European integration. Factoid.

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France: Whither Indicative Planning?

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  1. France: Whither Indicative Planning? • The country of paradoxes (dirigisme a la Colbert and laissez faire) centrism and regionalism, socialism and nationalism, mercantilism and protectionism • The revolutionary tradition • The country of –isms • The European integration

  2. Factoid http://www.odci.gov/cia/publications/factbook/geos/fr.html

  3. The theory of indicative planning • CGP (Ministry of Economy and Finance) • Marshall Plan :http://lcweb.loc.gov/exhibits/marshall/ • INSEE (plan organization) information gathering and forecasting • Warranted growth rate • Information gap • Commitment through participation, expertise and contract (concertation, communication, bargaining)

  4. The issues of indicative planning • Market failure in access to reliable info (rates of growth, interest rates, currency trends etc) • Information costs and a dialogue about needs and intentions • Informed macroeconomic environment for microeconomic decision making (parameters) • Forecasting of the trends and self-fulfilling prophecies • Information as a public good • No forward markets can replicate government info provision

  5. Deficiencies of indicative planning • Reliability of the estimates (discounting exogenous changes) • Potential endogenous equilibria might be challenged by exogenous shocks • Degree of compliance (business optimism instead of running amok animal spirits) • Tacit collusion and a decrease in competitiveness and erosion of competition

  6. Performance of plans • War damage repair • Concertation or dialogue (info sharing and interaction of micro-agents)) • Macroeconomic forecasting (success peak) • Social goals, infrastructure, regional policy • Microeconomics, competitiveness, inflation • Supply side rapid industrial growth • Anti-planning phase ( the presidency of d’Estaing)

  7. The history of plans • Jean Monnet 1947 Recovery • Harmonization 1952-1965(conflict of short term stabilization and long term investment) • Social concerns 1965-1975(regional plans and technical models) • Late 1970s planning decline • 1980 socialist reforms (expansion of the public sector) Mitterrand 1989

  8. Current planning agenda • Globalization and the French economy • The evolution of the European union • Social cohesion ( diminishing various divides) • Institutional modernization

  9. Continued • High-tech momentum(1980-1984) • Administrative decentralization(1984-1988) • European integration (1989-1992) • Maastricht treaty • The Eastern expansion of the European Union

  10. Labor-management relations • Corporatism • Autogestion • High unemployment (discouragement of labor supply)

  11. The role of the state • The evolution from a large state sector to greater privatization and mixed forms • The decline of indicative planning and the strengthening of protectionism • The internal politics of bridging divides and continuing welfare state

  12. The identity of France • From statism to the center of europeanization to world presence and leadership in individual industries and staunch standing on agricultural policy

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