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Abstract

this paper: Robert Boyer, Peter Hall, Ellen Immergut, Bruno Palier, Wolfgang Streeck, Kathleen Thelen, Nicolas Vron, and John Zysman. the post-dirigiste French state failed to shrink; by some measures, it has become bigger than ever. This chapter uses a comparison of France and Japan to recast understandings of the changing place of the state in today's global economy. We advance two main claims. The first is that the road to dirigiste rollback is paved with new state interventions. Moreover, these interventions are not simply transitional in nature. Rather, they constitute a core feature of a more market-centered political economy. In France, de-dirigisation was purchased at the expense of expanded state activity in the social arena. Getting the state out of industrial policy required getting the state into social and labor market policy. The policy innovations of the past twenty years have been designed to pacify and demobilize potential opponents of market- led adjustment. Once regarded as a "welfare laggard," France now has the biggest welfare state outside, and labor market spending also approaches Scandinavian levels. Our second claim, inspired by the Japanese case, is that the failure or unwillingness to construct a European-style welfare state tends to generate three pathologies among statist political economies: 1) the diversion of industrial policy from economic modernization to job protection; 2) a growth in new state activities unaccompanied by the benefits of a market-led political economy; 3) limits on the possibilities for economic liberalization. As Japan's economy began to slow in the 1970s, Japanese authorities consciously decided to avoid created a European-style welfare state. Officials, particularly within the Ministry of Finance, feared that genero..