This paper seeks to give a broad overview of the major developments in the French economic order
since the Second World War. First by enlarging upon historical changes in the French economic
policy and further by describing the structure of the economic sectors of the French economy today,
focusing on the French companies. The strengths and weaknesses of the French industrial production
will be reflected by an analysis of its export and import sectors. As a theoretical base for the paper serves the Varieties of Capitalism approach by Hall and Soskice. In their theory of comparative capitalism they regard France as one possible model of capitalism, namely in between a coordinated and a liberal market economy (CME/LME). In this paper Hall and Soskice´s
theory is supposed to have an explanatory function for the described institutional characteristics in the
French economic order. Generally Hall and Soskice´s approach has to be seen in the tradition of
comparative political economy, yet going beyond former theories as Shonfield´s modernization
approach, neocorporatism or the social systems of production approach. By drawing on game theory
Hall and Soskice even create a interdisciplinary approach addressing both econonomics and political
scientists. Hall/Soskice try to provide a new theoretical framework to analyse and understand the
nationa l similarities and differences in political and economic institutions, shifting the focus of
attention to the role of firms in the economic performance and the institutions that condition or alter
interaction between economic actors. In these interactions, various actors e.g. firms rationally try to
defend their interests. For firms the five most important interaction spheres vital for the firms
development, production and profitability are industrial relations, vocational training and education,
corporate governance, inter- firm relations and the interaction with their own employees. Interactions
like these often create uneven information levels and thus entail coordination problems. Hall and
Soskice take the view that the different ways in which firms handle these coordination problems can
be used to compare national political economies. Firms in LMEs rather tend to solve their
coordination problems with the help of market mechanisms. Firms in CMEs refer to non-market
relationships, e.g. institutions that promote the exchange of information among actors. [...]
Table of Contents
Introduction
1. Major shifts in the French economic order
2. Historical overview of the French economic policies shaping the French economic order
3. Economic sectors in France- their development, their contribution to the GDP and to employment
4. French enterprises- sizes, employees, production and worldwide activity
5. French exports and imports
Conclusion
Research Objectives and Topics
This paper provides a comprehensive analysis of the major structural developments within the French economic system since World War II. It examines the transition from state-led "dirigisme" to a more market-oriented economy, utilizing Hall and Soskice’s "Varieties of Capitalism" framework to understand how institutional structures shape corporate strategies and industrial competitiveness.
- Analysis of the historical shifts in French economic policy.
- Evaluation of the "Varieties of Capitalism" approach in the French context.
- Examination of the industrial sector, corporate governance, and regional enterprise networks.
- Assessment of the role of state intervention versus market mechanisms.
- Overview of France’s global trade position and export/import performance.
Excerpt from the Book
1. Major shifts in the French economic order
The post-war French economy has been marked by two major shifts: The first shift in the French economy happened between 1958 and 1973- it was the successful transformation of France from an agricultural economy to a modern industrial power, catching up to the top group of western industrialized nations. The second significant shift took place from 1986 until 1995, when France turned to a more market-oriented economy, profoundly restructuring the French production regime.
For the present situation Hancké concludes that: „A new model has emerged, which still relies on many elements of the old French system, in which the state and the large firms are critical actors but it does so against a corporate governance background which is integrated in the international (Anglo-Saxon) capital market.“
The new equilibrium the French economy has found, corresponds with the assumption of Hall/Soskice, that national political economies often have to face external shocks, that challenge the existing coordination solutions of firms, leading them to modified practices to sustain their competitive advantage, including comparative institutional advantage.
Summary of Chapters
Introduction: Provides a theoretical overview of the French economic order using the Varieties of Capitalism approach by Hall and Soskice.
1. Major shifts in the French economic order: Describes the transition from post-war dirigisme to a market-oriented model and the influence of international capital markets.
2. Historical overview of the French economic policies shaping the French economic order: Details the evolution of industrial policies from the 19th century through the nationalization waves of the 1980s.
3. Economic sectors in France- their development, their contribution to the GDP and to employment: Analyzes the structural shift from agriculture toward the service sector in the French economy.
4. French enterprises- sizes, employees, production and worldwide activity: Examines the dominance of large firms and the role of corporate networks in maintaining French competitiveness.
5. French exports and imports: Evaluates France's trade performance and its specialization in high-quality goods within the European market.
Conclusion: Summarizes the challenges of balancing coordinated market structures with the pressures of globalized economic competition.
Keywords
French economy, Dirigisme, Varieties of Capitalism, Industrial policy, Economic sectors, Corporate governance, Globalization, Market-oriented economy, Institutional framework, National champions, International trade, Comparative institutional advantage, Privatization, Economic sectors, Coordination problems.
Frequently Asked Questions
What is the central focus of this paper?
The paper examines the major structural transformations of the French economy since the Second World War, focusing on the shifts between state-led interventionism and market-based systems.
What are the primary thematic areas covered?
Key themes include historical economic policy, the institutional structure of French firms, the transformation of economic sectors, and France’s role in global trade.
What is the primary objective of the study?
The goal is to apply the Hall and Soskice "Varieties of Capitalism" framework to understand how France navigates the tension between a coordinated market economy and the pressures of global market liberalization.
Which scientific methodology is utilized?
The study employs a comparative political economy approach, drawing on game theory and institutional analysis to interpret the behavior of firms and the state.
What does the main body of the work cover?
It covers the historical transition phases of the French economy, the role of corporate networks, industrial sectoral shifts, and a detailed analysis of import/export trade patterns.
Which keywords characterize the work?
Major keywords include Dirigisme, Varieties of Capitalism, institutional framework, industrial competitiveness, and economic globalization.
How does the concept of "noyau dur" influence the French economy?
The "noyau dur" represents a hard core of shareholders in privatized enterprises that ensures state influence and protects companies from hostile foreign takeovers, maintaining a lingering element of dirigiste control.
Why does the author argue that France struggles with radical innovation?
The author notes that, as a coordinated market economy, France is better suited for incremental innovation, which often puts it at a disadvantage in sectors requiring rapid, radical technological breakthroughs like computer technology.
- Quote paper
- Joanna Mastalerek (Author), 2004, French Economic Order, A brief overview of the major shifts in the French economy,the economic sectors and companies in France, Munich, GRIN Verlag, https://www.grin.com/document/34911
