Report
Patrick Artus

France: What happens when the government is both expensive and inefficient?

The French government's inefficiency can be seen in the areas of education, vocational training, follow-up of the unemployed, healthcare, etc. Yet the weight of public spending is extremely high in France (even if pension spending is stripped out): the government is therefore both expensive and inefficient in France. Government inefficiency leads to low productivity gains and employment rate, and therefore low potential GDP; the high cost of government leads to a very high tax burden. We then see the scale of the problem: The lower the level of potential GDP, the higher the tax burden; It reinforces the negative effect of government inefficiency on the employment rate and production and income levels.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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