Getting Institutions Right for Productivity Enhancing Policies: A French View in a European Context

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Information about Getting Institutions Right for Productivity Enhancing Policies: A French...

Published on July 12, 2016

Author: Structuralpolicyanalysis


1. Getting institutions right for productivity enhancing policies: a French view in a European context OECD Productivity forum Fabrice Lenglart France Stratégie, deputy commissioner 1 Titre de la présentation

2. 2 Outline  European coordination on productivity-enhancing reforms  National productivity-enhancing institutions: the case of France  Linking the two : National Competitiveness Councils

3. 3 A European framework  Coordination in Europe before the crisis  Fiscal policy: SGP  Productivity policy: Lisbon strategy and CSR  Competitiveness performances: overlooked => Led to divergences at the origine of major macro-imbalances  Since the crisis  Fiscal policy: deepened and strenghtened SGP  Productivity policy: MIP + European Semester (reinforced CSR)  Competitiveness policy: MIP + reinforced CSR but no analysis of intra EZ relative competitiveness

4. 4 A European framework Total Factor Productivity Source: OECD

5. 5 A European framework Real unit labor cost Source: AMECO

6. 6 Main limits and problems  Limits:  Top-down approach  Lack of granularity for the diagnosis  Lack of national ownership  Weak influence on national stakeholders  Why is it a problem?  Pro-growth policies much needed in Europe – poor track record  Current account and competitiveness divergences not sustainable  Uncoordinated structural reforms, if leading to deflationary pressures, may create difficulties in a monetary union in the current context

7. 7 National productivity-enhancing institutions: the case of France  Several institutions in charge of productivity diagnosis and recommandations but alongside other objectives:  French Treasury  Business Directorate (DGE)  France Stratégie (former French Central Planning Bureau « Commissariat Général au Plan »)  CAE – Council of Economic Advisers  CEPII (Main French International Economy Centre)  Industry National Council  Commissariat-General for Investment  Numerous ad-hoc reports on productivity and competitiveness

8. 8 Productivity-enhancing policies: renewed focus in France  2013 Shared diagnosis leading to ambitious and consistent policies Gallois report CICE: job and competitiveness tax rebate 20Bn€ (1% GDP) Responsibility Pact: additional 20Bn€ (1% GDP)  Strenghtening evaluation Ex-ante evaluation: Macron Law Ex-post evaluation: CICE Innovation policy evaluation  Main limitations: No single institution with a clear mandate on productivity and competitiveness Lack of a common European assessment

9. 9 Creating National Productivity Boards across the EZ and the EU  Increase national awareness and ownership on issues related to productivity and competitiveness  Foster consistency of competitiveness analysis among EZ members  Monitor wage-price developments and avoid the build-up of new competitiveness divergence  Support bottom-up cooperation and shared analysis on cost and non-cost competitiveness issues

10. Institutions: What should NPB look like?  Nature  Bridges between aggregate and granular levels / between overall objectives and individual decisions  Fora for dialogue on competitiveness record, determinants and desirable directions  Tools  Collect data, create smart and comparable indicators at the aggregate and sectoral level, present this information in a user-friendly way  Annual report with recommendations to government and social partners  Institutional arrangements  Depend on national characteristics (degree of wage-setting centralisation, relationship between government and social partners)  Independent experts body with a permanent secretariat to build and maintain statistical toolbox  Work in close consultation with social partners  Reports by body of independent experts 10

11. Critics and answers  No need to interfere with market-based process? => Experience suggests need to monitor competitiveness  Wage negotiation is the social partners’ business => NPB will only inform the debate  It will be another European interference into a sovereign issue => more decentralized / bottom-up than present MIP  It will add another layer of complexity into European coordination => Light coordination process 11

12. Thank you 12

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