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Concept
Dirigisme
Summary
Dirigisme or dirigism () is an economic doctrine in which the state plays a strong directive (policies) role, contrary to a merely regulatory interventionist role, over a market economy. As an economic doctrine, dirigisme is the opposite of laissez-faire, stressing a positive role for state intervention in curbing productive inefficiencies and market failures. 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 state enterprises 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 Japan, the East Asian tiger economies of Hong Kong, Singapore, South Korea and the Republic of China (ROC), and more recently the economy of the People's Republic of China (PRC) after the Chinese economic reform, and India after the opening of its 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.
Before the Second World War, France had a relatively fragmented capitalist economic system. The many small companies, often family-owned, were often not dynamic and efficient in comparison to the large industrial groups in Germany or the United States. The Second World War laid waste to France.
Official source
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