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Dirigisme () or dirigism () is an economic doctrine in which the state plays a strong directive (policies) role, contrary to a merely Regulation or non-interventionist role, over a market economy. "Dirigisme". Oxford Dictionaries. Retrieved 25 May 2013. As an economic doctrine, dirigisme is the opposite of laissez-faire, stressing a positive role for state intervention in curbing productive inefficiencies and . Dirigiste policies often include indicative planning, state-directed investment, and the use of market instruments (taxes and subsidies) to incentivize market entities to fulfill state economic objectives.
The term emerged in the post–World War II era to describe the economic policies of France which included substantial state-directed investment, the use of indicative economic planning to supplement the market mechanism and the establishment of in strategic domestic sectors. It coincided with both the period of substantial economic and demographic growth, known as the Trente Glorieuses which followed the war, and the slowdown beginning with the 1973 oil crisis.
The term has subsequently been used to classify other economies that pursued similar policies, such as Canada, the Netherlands, Japan, the East Asian tiger economies of Hong Kong, Singapore, South Korea and Taiwan; and more recently the economy of the People's Republic of China (PRC) after its economic reforms, (1996). 9781349141579 ISBN 9781349141579 Malaysia, Indonesia and India before the open economy in 1991.
Most modern economies can be characterized as dirigiste to some degree as the state may exercise directive action by performing or subsidizing research and development of new technologies through government procurement (especially military) or through state-run research institutes.
Post-war French governments, from whichever political side, generally sought rational, efficient economic development, with the long-term goal of matching the highly developed and technologically advanced economy of the United States. The development of French dirigisme coincided with the development of meritocracy technocracy: the École Nationale d'Administration supplied the state with high-level administrators, while leadership positions in industry were staffed with Corps of Mines state engineers and other personnel trained at the École Polytechnique.
During the 1945–1975 period, France experienced unprecedented economic growth (5.1% on average) and a demography boom, leading to the coinage of the term Trente Glorieuses (the "Glorious Thirty years").
Dirigisme flourished under the conservative governments of Charles de Gaulle and Georges Pompidou. In those times, the policy was viewed as a middle way between the American policy of little state involvement and the Soviet policy of total state control. In 1981, Socialist president François Mitterrand was elected, promising greater state enterprise in the economy; his government soon nationalization industries and banks. However, in 1983 the initial bad economic results forced the government to renounce dirigisme and start the era of rigueur ("rigour"). This was primarily due to the Inflation of the French Franc and the Keynesian policies taken by François Mitterrand. Dirigisme has remained out of favour with subsequent governments, though some of its traits remain.
In contrast to Soviet-type central planning practiced in the former Eastern bloc, where economic planning substituted private profit incentivized investment and operated the factors of production according to a binding plan, the French state never owned more than a minority of industry and did not seek to replace private profit with central planning. The idea of dirigisme is to complement and improve the efficiency of the market through indirect planning intended to provide better information to market participants. This concept is held in contrast to a planned economy, which aims to replace market-based allocation of production and investment with a binding plan of production expressed in units of physical quantities.
Two areas where the French government sought greater control were in infrastructure and the transportation system. The French government owned the national railway company SNCF, the national electricity utility EDF, the national natural gas utility GDF, the national airline Air France; phone and postal services were operated as the PTT administration. The government chose to devolve the construction of most autoroutes (freeways) to semi-private companies rather than to administer them itself. Other areas where the French government directly intervened were defence, nuclear and aerospace industries (Aérospatiale).
This development was marked by volontarisme, the belief that difficulties (e.g. postwar devastation, lack of natural resources) could be overcome through willpower and ingenuity. For instance, following the 1973 energy crisis, the saying "In France we don't have oil, but we have ideas" was coined. Volontarisme emphasized modernization, resulting in a variety of ambitious state plans. Examples of this trend include the extensive use of nuclear power (close to 80% of French electrical consumption), the Minitel, an early online system for the masses, and the TGV, a high-speed rail network.
After liberalisation in 1991, India shifted from a planned dirigisme to market dirigisme economy. The Indian state has complete control and ownership of Indian Railways, highways; majority control and stake in banking, insurance, farming, Operation Flood, fertilizers & chemicals, airports, nuclear, mining, digitization, defense, steel, rare earths, water, electricity, oil and gas industries and power plants, and has substantial control over Digital India, Broadband as national infrastructure, telecommunication, supercomputing, space, port and shipping industries, among other industries, were effectively nationalised in the mid-1950s. In essence, the Indian Government has indirect control on all sectors except technology and consumer goods.
Dirigisme has been brought up as a politico-economic scheme at odds with laissez-faire capitalism in the context of French overseas holdings. To varying degrees throughout the post-colonial period, countries such as Lebanon and Syria have been influenced by this motif.
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