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

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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)

  • Léo Vigny

    (CEPN - Centre d'Economie de l'Université Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord)

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% 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.

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  • Aïmane Abdelsalam & Léo Vigny, 2025. "Resurgence of fiscal interventionism: a longitudinal analysis of public aid to businesses in France since 1949," CEPN Working Papers hal-05000473, HAL.
    • Handle: RePEc:hal:cepnwp:hal-05000473
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-05000473v1
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    fiscal policy; tax expenditures; public aid; sibsidies;
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