Planning and Economic Growth: The Example of France

Abstract

At the beginning of 1946 the French government established a Planning Commission, headed by the businessman Jean Monnet. It brought together representatives of capital and labor, and technicians to draft a four-year plan for reconstruction and to modernize and develop the French economy. The plan, generally called the Monnet Plan, was completed in the fall of 1946. It represented a break with traditional French attitudes in its proposal to merge reconstruction into general economic growth by concentrating investment at key points and by substantial government direction. It set as a goal for 1952 a 14 per cent increase in the gross national product above the 1929 level, to be achieved by planned investment in six key industrial sectors. The system of planning developed in France by the technicians of the Planning Commission was not a centralized production program but rather “indicative planning.” It set production goals and then used the weapons of government investment and fiscal policy to encourage private enterprise to work toward those goals. By the mid-1950’s France had emerged from its prolonged economic stagnation and had entered upon steady yet venturesome growth. The followng documet is an excerpt from Parts I and II of the Monnet Plan.