From 1947 to 1950 direct controls on wages and distribution were eliminated followed by removal of trade controls in 1958. However, the government continued to maintain its hold over prices and credit distribution which made it different from many of its neighboring states in the postwar period. The French Ministry of Finance exerted greater control over the economy than the Bank of France. This led to a greater predilection to resort to devaluation when external equilibrium resulted due to the state failure to control incomes. In France, the period between 1945 and 1975 was known as the "thirty glorious years" because of the phenomenal economic performance. During this period, the average growth rate of GDP was around 6.8% which was quite remarkable considering that Britain's average GDP growth rate was 2.4% and Germany's was 4.8%. (Graham; Seldon, 295)
The National Champions Policy initiated by Charles de Gaulle in the late 1950s continued through the early 1980s and attempted to form conglomerates by concentrating the French industry. The main motive behind this policy was to enhance the industrial competitiveness of France and to elevate the nation to an autonomous industrial power without depending on other economies. The franc was devalued in order to attract foreign investment and to retain the money of French citizens in the country. Between 1957 and 1962, Foreign Direct Investment by U.S. alone grew by 17.3% every year. However, FDI slowed down after France laid off a large number of workers General Motors France and Remington Rand France as a part of economic restructuring. Tight governmental controls over FDI with the requirement of producing large amounts of information by companies willing to invest in France slowed down the growth of FDI in France. French investment in other countries was quite low until the mid eighties. Outward investment in France required permission from the Ministry of Finance and the condition that 75% of the outward investment had to be taken from foreign exchange. (Post-World War II French Industrial Policy: The Problems with Government Intervention, the Implications for World Politics)
The government's lack of enthusiasm in outward investment and the tariff-free goods imported from the Common market led to the decay of the protectionist policies and the nationalized industry of France. The French economy achieved a small degree of international success due to the economic policies followed by Giscard between 1974 and 1980 when subsidies for a small number of selective French companies in specific industries were increased threefold. Promoting the mergers of small manufacturing enterprises -- SMEs led to a large-scale deskilling of workers and of large firms that manufactured standardized but low-cost products. (Post-World War II French Industrial Policy: The Problems with Government Intervention, the Implications for World Politics)
When the socialists came to power in 1981, they started a massive drive for nationalization of industries supported by huge amounts of government aid. The economic policies followed by the Socialist governments led to massive losses in the public sector, a large budget deficit and increased inflation levels. After the Socialist regime ended, France started concentrating on privatization of its industries and promoting outward as well as inward investments by relaxing the laws that controlled it. As a result, its average FDI outflow increased from $3.25 billion from 1984-86 to $19.53 billion from 1987-90. France lifted all trade restrictions and investment restrictions and completed its liberalization process by 1996. (Post-World War II French Industrial Policy: The Problems with Government Intervention, the Implications for World Politics)
From 1999 onwards, the French economy has witnessed strong...
Further, while inequality may have increased, on average, within countries, inequality measured across all the people of the world, may actually be falling. Pritchett does not address this issue. In addition, Pritchett provides no explanation of why globalization is not rendering conditional occurrence a reality. This would have been useful for supporting the author's conclusion that divergent polices are needed to address the unique needs of specific countries. The most
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