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Chapter 12&13 - Chapters 12 and 13 France's GDP is...

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Chapters 12 and 13 France’s GDP is the 6 th largest in the world. This is due to the vigorous role of the state post WWII yet in the last 20 years the state’s role has shrunk due to changing ideological orientations, EU commitments, and participation in the global economy. France is ranked second in terms of capital invested abroad and third as a location for foreign investment. France different from other European states post WWII in that it aimed to, “maintain an equilibrium among industry, commerce, and agriculture and attempted to insulate France from the distress and upheaval that had struck other nations bent upon rapid economic advance. Post war settlement and beyond: France was liberated and 4 th republic started in 1946. The term postwar settlement describes the pattern of compromise among key social classes and social forces that worked together to promote economic modernization and growth. Especially prominent in France because it involved a dramatic contrast with prewar economic and political patterns. State and Economy: France well equipped to develop the institutional capacity to steer the economy because of its long statist tradition. France resembled other capitalist countries in developing an arsenal of institutions for managing the economy by lodging responsibility in new public institutions staffed with modernizers, relied heavily on state intervention and planning. Ended up with a blend of state direction, corporatist bodies and market forces. French Style Economic Management: Planning: Indicative planning is a national planning commission of civil servants appointed by the government established broad national economic and social priorities for the next four or five years. Along with modernization commissions, comprising private and public officials, established targets for specific economic and social sectors. - plans determined max feasible rates of econ growth, crash programs for the development of specific industries and regions De Gaulle’s leadership: Real steps forward with planning began in 1958 when De Gaulle regained power and created the 5 th republic. Deepened the style of state led industrialization and growth that originated in the 4 th republic. State gave cheap credit towards favorite sectors and firms, encouraged the creation of large firms or national champions. -Dirigisme- Dirigiste (dirgisme) literally directorial, the name for the new relationship between state and economy. Tools the state used: offered subsidies, loans and tax write offs to achieve industry concentration, specialization in new fields and tech innovation, limited the outflow of French capital, until 1970 provided the bulk of capital for new investment, restructuring key sectors including steel, machine tools and paper products
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by steering credit and pressuring medium sized firms to merge into national champs, creating and managing entire industries one example is nuclear power -Thirty glorious years (1945-1975) remarkably successful with high economic growth (pg 236 if you want statistics)
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