Tuesday, 27 October 2015

New CGR Working Paper: Elite Thickets and Institutions: French Resistance versus German Adaptation to Economic Change, 1945-2015




The new CGR Working Paper explores the nexus between Institutions, Elites and Policy-making, It details how the composition of the French state and those in charge of the state business have resisted institutional adaptation and change, leading to behavioral stasis, dependency on state solutions and institutional deterioration. A development that contrasts with a German institutional structure that has been able to adapt to incremental technological change and economic globalization. 

To explain French resistance to change the paper highlights the interplay between cultural attitudes and institutional formation, and its role in maintaining and preserving elites. In first place it identifies an Elite Thicket across French companies, a total of 77 directors that have multiple positions across 39 of the CAC-40 firms, and analyses the education and professional trajectories of these directors.. 

Grahp 1: Career Trajectories of France’s Elite Thicket


The Elite Thicket takes its name from  the concept of a Patent Thicket, where ownership of discrete pieces of knowledge overlaps through multiple patents and discourages innovation. We define  the Elite Thicket as a web of connections of interrelated and vested interests which has resisted institutional adaptation in order to preserve their rents. We can identify these overlapping  interests through homogeneous career paths and formation; in the case of France their education through the Grandes Écoles and the process known as pantouflage, the transition from high civil service to top management positions. Graph 1, shows the different career trajectories of those in the  Elite Thicket, divided into three categories: Business Careers, State Elite Careers, and Elite Enarques. Business Careers are  careers developed solely in  the private sector, State Elite careers are Grandes Écoles graduates who  started their careers in the higher echelons of the civil service before moving  to top managerial positions in  the private sector, Elite Enarques consist of ENA Graduates who  have passed through the Grand Corps: The Conseil d’État, Inspection des Finances and Cour des Comptes. As we can see in table 1, across the CAC-40 the Elite Thicket is very much present and alive across the boards of Private France, with 35 of the 77 directors connected across multiple boards having started their careers in the civil service.  This contrasts with Germany since 1945 with no such Elite Thicket and a looser relationship between business and the state. 


This paper explores how these different Elite Structures are reflected in different Mental Models or doxa, the intellectual structures that underpin and reinforce elite and institutional reproduction in their respective societies. It follows Mary Douglas (1986) in explaining the entrenching of institutions as an intellectual process, as well as an economic and political one. So in France the Mental Framework, reflects a centralized activist state with a tight-knit Elite Thicket, while Germany has a more diffuse mental model reflecting a state with a looser elite an a tradition of decentralized corporatist collective bargaining, where the state has a mediating and rule-making role rather than an interventionist one, as we can observe in Graph 2 that summarises analysis conducted in the paper of French and German Values and Attitudes through the European World Values Survey and the World Values Survey. 

Graph 2: France and Germany Values and Attitudes 



We can observe how a higher proportion of French citizens consider  obedience and authority to be important, however they are less sure about  how to behave. They rank private enterprise less highly than do the Germans   and rank job security less important than do the Germans.  In contrast a higher proportion of German Citizens consider  Independence to be important and   a higher proportion are also more sure about  how to behave; they tend to value Job Security more but also to support meritocracy and private enterprise. . We find that these values reflect the modes of policy-making that come out from French and German Institutions, with  Germany more Rule Bound but decentralized, with an economic culture reflecting a mediated market: while France appears more discretionary but hierarchical, with an “Etatist” economic culture. 


These different Elite Structures and Mental Frameworks are also reflected in the evolution in formal institutions. We argue that the Elite Thicket in France has contributed  to poorer quality government since 1995 as a result of values that support hierarchical (centralized) and discretional (top-down interventionist) policy making. We contrast this with greater institutional adaptability in Germany associated with dualization in its industrial structure and values endorsing rule-bound, decentralized mediation in policy-making. 


To continue read the full paper go to: 

1 comment:

  1. It reflects precisely my observation. The problem is not only the elite, but the whole ideology, specially in the education system. They still have the idology of the restauration in the 19th century after the Napoleon war. They produce only subordinaries who can not think on their own. They purely rely on the authorities, they only do what is demanded, only as much just not to get punished, never think about what they are doing. And in return the subordinaries demand that the authorities care for them. And if they don't care enough, they make violent revolution. Just have a look how trade union actions happen.

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