Dirigisme

Dirigisme or dirigism (from French diriger 'to direct') is an economic doctrine in which the state plays a strong directive role as opposed to a merely regulatory or non-interventionist role over a capitalist market economy.[1] As an economic doctrine, dirigisme is the opposite to laissez-faire, stressing a positive role for state intervention in curbing productive inefficiencies and market failures. Dirigiste policies often include indicative planning, state-directed investment, and the use of market instruments (taxes and subsidies) to incentivize market entities to fulfill state economic objectives.

The term emerged in the post-war 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, most notably the East Asian tiger economies, India during pre-liberalisation period[2][3] and more recently the economy of the People's Republic of China.[4] State capitalism is a related concept.

Most modern economies can be characterized as dirigist to some degree as the state may exercise directive action by performing or subsidizing research and development of new technologies through government procurement (especially military) or through state-run research institutes.[5]