4.  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 

5.  Legacy of French Colonialism o French Algeria in World War II Reconstruction o Algerian Independence Pied-Noir vs. Harkis o North African Immigration The expansion of the Banlieue (5 million residents) 20% unemployment (8.6%) 26.5% poverty (6%) 15% single parent families (8%) Second generation “immigrants” more assertive

6.  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

8. Tax RateUS Income Bracket Tax RateFrench Income Bracket 10%0-83500%0-8252 15%8351-339505.5%8253-16461 25%33951-8235014%16462-36561 28%82251-17155030%36562-98018 33%171551-37295040%98018+ 35%372951+

10.  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

11.  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

12.  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

13.  Components ◦ French Air Force French Air Force ◦ French Army French Army ◦ French Navy French Navy ◦ Force de frappe Hervé Morin (Minister of Defense)

14.  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

15.  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

16. ◦ 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

17.  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

18. Policy Outputs are Political Goods