FRANCE’S ECONOMIC SYSTEM

CATHERINE WANNEMACHER

Political History French Revolution in 1789 - overthrew

monarchy - first republican

government Napoleon Empire 1804 – implemented liberal

reforms e.g. abolition of feudalism

Napoleonic Code influenced numerous civil jurisdictions worldwide; first modern legal code

e.g. forbid privileges based on birth, allowed freedom of religion, government jobs should go to most qualified

Monarchy restored once, followed by several republics

Currently in its Fifth Republic established in 1959

Economic History Tradition of state intervention

Dirigisme economic systemic between 1944 to 1983

e.g. nationalization of major industries including transportation, electricity, banking sector etc.

In recent years, government has sold shares in corporations esp. due to EU regulations

- still exercises control over the economy

Political System Republic (5th) – governance defined by the

Constitution Semi- presidential representative democratic republic

Includes a popularly elected President (head of state) and a Prime Minister (head of government) and Cabinet

Executive Branch have most power esp. President e.g. appoints all member of Cabinet and PM, military control etc.

Multi-party system Checks and Balances

e.g. President appoints PM, National Assembly can revoke appointment

Various organizations are independent of Executive branch E.g. Bank of France, Financial Boards, Energy regulations

Culture Individualistic society – greater concern on

social status and being judged as an individual Low tolerance for uncertainty – role of

planning important

Culture Hofstede Cultural Dimensions

Organizational Structure Centralization – concentrated authority lies in

one individual usually Reflected in government and businesses;

(geographically) e.g. two more hierarchical levels more

Originate in power and authority of earlier monarchs

Property Rights Civil law – allows private property

e.g. Napoleonic Code first introduced absolute ownership

2014 Property Rights Index 7.3 Measures degree to which country’s laws protect

private property rights and degree government enforces these laws

Assesses likelihood of private property expropriation

And corruption within judiciary Right to buy and sell Right to reek profits

Allocation Mechanism Markets

Solves problems of resource allocation- decides amount of goods and service to be produced

Incentives Material incentives

e.g. wage, bonus, stock options for managers etc.

Role of Planning High due to low tolerance to uncertainty State intervention is still exercised

E.g. subsidies, planning inputs and outputs

Social Safety Net Standard income – minimum hourly wage Social security benefits Illness, maternity and disability insurance Family benefits – allowances, family housing

etc. Unemployment insurance

Human Development Index (UN) Measures human development progress in

three dimensions: long and healthy life, access to knowledge and standard of living (i)life expectancy (ii) mean years of education (iii)

Gross National Income per capita 2013 HDI value 0.884 – very high category

rank 20 out of 187 countries

Human Development Index (UN)

Human Development Index (UN) HDI progress relative to other countries

GDP Growth Rate (%) Average growth rate from last four years

(2010-2014) = 0.825 % From Data World Bank

Economic Freedom Index (Heritage Freedom) Moderately free 63.5 index (rank 70 out of

175 countries) slightly decreased compared to last year

Index covers 10 freedoms including trade freedom, monetary freedom, property rights and entrepreneurship rights Weighted equally

brings greater prosperity

Political and Civil Liberty (Freedom House)

Political Rights 38/40 Electoral process 12/12

French President, lower house Parliament ,National Assembly elected to five year terms

Political Pluralism and Participation 15/16 Parties organize and compete on free basis Centre right UMP and Centre left PS are largest parties; far right and National Front

Functioning of Government 11/12 Civil Liberties 57/60

Freedom of Expression and Belief 15/16 Associational and Organizational Rights 12/12 Rule of Law 15/16 Personal Autonomy and Individual Rights 15/16

Corruption Perception Index (Transparency International) Based on the degree of corruption in the

public sector

World Happiness Index rank 25 Measures happiness as an emotion and as a

whole in life

Sources sourceshttp://en.wikipedia.org/wiki/Napoleonic_Code

http://europeanhistory.about.com/od/france/a/cpfrance.htm http://www.nationsencyclopedia.com/economies/Europe/

France-OVERVIEW-OF-ECONOMY.html http://education-portal.com/academy/lesson/checks-

balances-internal-limits-of-the-french-executive-branch.html#lesson

http://www.globalsmes.org/news/index.php?func=detail&detailid=512&catalog=24&lan=en

http://internationalpropertyrightsindex.org/data_download http://www.cleiss.fr/docs/regimes/regime_france/

an_index.html All websites on the Data Sources sheet

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