Resurgence of fiscal interventionism: A longitudinal analysis of public aid to businesses in France since 1949

Aïmane Abdelsalam () and Léo Vigny
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Aïmane Abdelsalam: CLERSÉ - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po
Léo Vigny: CEPN - Centre d'Economie de l'Université Paris Nord - Université Sorbonne Paris Nord, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po

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Abstract: The 1980s marked the transition from demand-driven Fordist policies to supply-driven ones, emphasizing budgetary discipline and competitiveness. However, this shift did not signal the end of fiscal interventionism but rather its transformation. In this paper, we introduce a novel indicator that encompasses all government-to-business wealth transfers, including direct expenditures and tax expenditures. This new measure offers a clearer picture of the level of government support for businesses. Findings reveal that French public aid surged over three decades, reaching 8 per cent of GDP by 2019, making it the fastest-growing budget item since the 1990s. Fiscal policy has not been abandoned in the post-Fordist era; it is now employed as a supply-side strategy rather than a demand-side one. We also evaluate this fiscal policy, showing that while state aid has a limited impact on employment and investment, it significantly boosts corporate margins after the Great Financial Crisis.

Date: 2026-07-08
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Published in Cambridge Journal of Economics, 2026, ⟨10.1093/cje/beag017⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05694966

DOI: 10.1093/cje/beag017

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