France: Whither Indicative Planning

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/marsh
  all/
• 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
  dEstaing)

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