Uneven ability to distribute benefits of growth fuels conflict ◦ Wealth becoming
more concentrated◦ Pockets of poverty in
the rural areas◦ Pockets of poverty in
the cities Unemployed
industrial workers Ethnic North
Africans
Urban decay: Paris
Overall capability high◦ Taxes levied by central government◦ Taxes levied by local government◦ Taxes levied by Social Security Association
(ASSO) Regressive taxation
◦ Percentage of income paid in taxes is higher for lower income people
◦ Indirect taxation Value Added Tax
19.6% base rate, 5.5% for food and books, 2.6% for medicine
Tax Rate US Income Bracket
Tax Rate French Income Bracket
10% 0-8350 0% 0-8252
15% 8351-33950 5.5% 8253-16461
25% 33951-82350 14% 16462-36561
28% 82251-171550 30% 36562-98018
33% 171551-372950 40% 98018+
35% 372951+
Nationalizations and post World War II “Catch up” policy
Gaullists and Socialists on same page Footprint of State control
◦ Banking◦ Energy and transportation◦ 13 of 20 largest firms ◦ 24% all workers received check directly from
government
Demands for privatization increase in late 1980’s because of poor performance by state industries
Calls by the political right for social spending◦ Modernization remains an issue
Dirigisme declines Socialism vs. liberalism
Most effective in social transfers◦ Education
18 million students (nearly 25% or population) Higher education is funded by the state 7.2% of GDP is spent on education
◦ Social security Income security Four additional types:
Illness old age family recovery
Other forms of income security
Components ◦ French Air Force ◦ French Army ◦ French Navy ◦ Force de frappe
Hervé Morin(Minister of Defense)
Attempt to Regain control over former Colonies◦ Indochina◦ Africa
De Gaulle’s withdrawal from NATO’s command structure◦ Plans for self sufficiency◦ Backdoor agreement with NATO
Socialists vs. Gaullists ◦ Socialists downplay national security◦ Chirac’s plans for defense modernization short-
circuited by Socialist victory in 1997 National Assembly elections
Current panorama ◦ Concern that France’s place in world declining
Gulf war – France made less of a contribution than Britain Balkan peace keeping reveals greater French military
weakness ◦ Focus on external power projection
Rejoining NATO’s command structure Terrorist groups in Francophone Africa Cases if Deployments abroad
Afghanistan Libya
◦ Some reduction over industry Inefficiency of state run
enterprises Remains issue of contention
between right and left ◦ Expanded with regard to
individual rights◦ Expanded in
environmental controls◦ Restrictions on individuals
of foreign origin Largely immigrants from
North Africa Religion important part of
regulatory battle
French culture/civilization still a source of pride
Cleavage of French Revolution largely healed
Ethnic consciousness growing◦ Historic minorities (Bretons)◦ Muslim immigration from North Africans
Head scarves