FRANCE’S ECONOMIC SYSTEM CATHERINE WANNEMACHER

Political History  French Revolution in 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 (5 th ) – 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 – very high category rank 20 out of 187 countries

Human Development Index (UN)

 HDI progress relative to other countries

GDP Growth Rate (%)  Average growth rate from last four years ( ) = %  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  OVERVIEW-OF-ECONOMY.html  of-the-french-executive-branch.html#lesson  og=24&lan=en    All websites on the Data Sources sheet

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