Dirigisme

Dirigisme (French: [diʁiʒism]), or dirigism (from French diriger 'to direct'), refers to an economic system in which the state takes an active and directive role in shaping and guiding the economy, rather than limiting itself to a purely regulatory or hands-off approach within a market economy. As an economic doctrine, dirigisme stands in contrast to laissez-faire, highlighting the constructive role of market intervention in addressing inefficiencies and market failures. Dirigiste policies typically include indicative planning, state-guided investment, and the strategic use of market instruments such as taxes and subsidies to encourage economic actors to align with national development goals. Dirigisme is not synonymous with a state-controlled command economy but a market economy and big public sector is required for dirigisme; hence the public sector becomes an instrument for altering the market. The term emerged in the post–World War II era to describe the economic policies of France which included substantial state-directed investment, the use of indicative economic planning to supplement the market mechanism and the establishment of state enterprises in strategic domestic sectors. It coincided with both the period of substantial economic and demographic growth, known as the Trente Glorieuses which followed the war, and the slowdown beginning with the 1973 oil crisis. The term has subsequently been used to classify other economies that pursued similar policies, such as Japan, the East Asian tiger economies of Hong Kong, Singapore, South Korea and Taiwan; the economy of China after the reform and opening up, Indonesia and India after the opening of its economy in 1991. Outcomes associated with dirigisme differ across these cases, with some economies achieving sustained growth and structural transformation, while others recorded more limited or uneven results. Dirigisme is not strictly tied to any single political ideology or philosophy, as variations of dirigiste policy have been implemented under...