Revisiting the French Model: Coordination and Restructuring in French Industry (in the 1980s and 1990s)

Abstract

To many it has become a well-known refrain: France is the problem case in the European Union. Whereas German industry makes the country an export powerhouse, the flexibility of the Third Italy has secured the survival of technologically less sophisticated companies, and the labor market deregulation in the UK under the Thatcher regime created the preconditions for economic growth and employment successes, the French economy seems to be caught in the worst of all worlds, and utterly incapable of doing anything about it. Companies remain organized in a topdown manner at a time that flatter hierarchies are presented as recipes for success; many small companies who are the engines of growth in other countries, are financially weak and technologically underdeveloped; the main corporate strategy is price-based competition; and the few attempts to deregulate the labor market seem to have given way not to less, but more unemployment. Reform attempts inevitably lead to large-scale conflicts, organized by small groups who refuse to give up their privileges. And in the background of all this looms the heavy shadow of the French state, at a time when governments in other OECD countries are rapidly withdrawing from the economy.

An earlier version of this chapter appeared in Peter A. Hall and David Soskice (eds) Varieties of Capitalism (Oxford University Press, 2001).