What are the Distributional Consequences of the Socialist Government Policy in France?

Abstract

AbstractDuring the past four years, French economic and social policy appears to have differed both from the policies followed previously in France and from those of the other industrialized countries. The difference can be judged from the goals pursued, the means used and the results obtained. One of the goals of the socialist government elected in May 1981 was to reduce income and wealth inequalities and to improve the well-being of the poor through an active social and tax policy. This goal was also a means, since these measures — along with an expansionary fiscal policy — were supposed to precipitate economic recovery and to reduce unemployment by stimulating consumption expenditures. Actual developments, however, led to quite a radical change in French macro-economic policy. The fight against inflation and the reduction of internal and external deficits since June 1982 and the search for industrial investment and competitiveness since 1983 have reoriented both social and tax policies.