Recent trends - Recent trends
- European countries have begun to initiate privatization& deregulation.
- UK: companies in public ownership-1979: 12% of GDP; 1997: 2%;
- France: partial privatization of France Telecom, Air France, Renault, Thales (defense & electronics)
- Germany: privatization of Deutsche Telecom, Deutsche Post
- Recently momentum has stalled; sales have declined from peak in 1998; weak stock markets
- "strategic" industrial holdings - govt. maintains some shares, controlling interest in some cases
- France Telecom 55.5%
- Air France 56%
- Thales 33%
- Renault 25%
- EDF (French electricity supplier) – One of the world’s largest producers of electricity; 2003-22% of the EU electricity; monopoly in France but has taken over suppliers in other European countries till 1999 when the first EU directive to harmonize regulation of electricity mkts was implemented. Until 2004 was a government corporation, but it is now a limited liability corporation under private law. Retain 70% government ownership.
- 3) Deregulation
- Privatization and regulation are related. The deregulation process in the US strengthened the US economy.
- Pursued by Thatcher in Britain in 1980 and also strengthened the economy.
- has been promoted by EU as part of the single market: gas and electricity and air travel were open to competition
V. French Indicative Planning - V. French Indicative Planning
- Features:
- Planning initiated after WW II to rebuild the capital stock. Planning was never meant to replace the market, but to improve its operation. Headed by General Planning Commissariat, much work is performed by Modernization Commissions, with labor, management, and government representatives. The Economic and Social Council reviews plan documents as they are formulated and Regional Development Commissions sponsor regional economic needs.
- No compulsory targets are prepared for enterprises.
- Decision making can be improved if a planning agency disseminate info to decision makers; such indicative planning is nonauthoritarian-no directive targets are issued.
- Planners project probable trends in the economy.
- Compliance with the plan is purely voluntary.
- The plan should indicate to enterprises the planners’ best estimate of the course of the economy.
- Broad sectoral growth targets related to input, output, investment and productivity
- Mechanisms for plan implementation
- budget and public ownership.
- With public ownership in key sectors such as banking, coal, gas and electricity, transportation, the state could influence econ activity through its control of credit, electricity and tax incentives
- The government urges compliance through influence over nationalized industries and banks, monetary and fiscal policies.
- After 1970 the French planning was of limited importance
- Econ institutions are judged by their durability. Institutions that work persists, those that fail are abandoned. The disappearance of indicative planning is probably the best indicator of its limited ability and utility to society.
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