French Dirigisme and the Social Investment State

Abstract This chapter examines why France, despite its historical achievements in universally available and publicly funded preschool education, has fallen short of a comprehensive social investment turn in recent decades. The in-depth analysis of reforms in the area of unemployment benefits, childcare, and pensions shows France has seen a myriad of reforms unfolding, yet these failed to cumulate into a systemic transformation. French elites have pursued fiscal consolidation and cost-cutting measures in traditional social protection domains while prioritizing tax incentives and activating conditionality over capacitating services in the labour-market arena. Lo and behold, social investment initiatives – ranging from the expansion of collective childcare to industrial upgrading and the universalization of the pension regime – regularly featured on the policy agenda. However, under France’s dirigiste governance model, political ‘twists and turns’ have repeatedly redirected these initiatives toward cash-based measures designed to manage short-term emergencies. Overall, France’s lack of staying power in social investment initiatives underscores the limitations of excessive state power concentration in pursuing transformative welfare recalibration. These findings further highlight a paradox among French policy elites, who regard the ‘German model’ with envy, but underestimate the significance of improving the relation between state and civil society for delivering enduring change.