dirigismo

Dirigismo is an economic policy approach in which the state plays a proactive role in directing economic activity. The term, often associated with French political economy, describes a form of state-led development in which government planning, coordination, and influence aim to steer investment, technology, and production while market forces continue to operate.

Key features of dirigismo include the use of development plans or strategic targets, specialized agencies to guide investment, and public or regulated support for priority sectors. Tools frequently employed are subsidies, preferential credit, public investment in infrastructure or key industries, state-owned enterprises in strategic areas, and procurement or regulatory measures that shape competition and prices. The objective is to accelerate structural transformation, promote technological progress, and align economic activity with broader social or national goals.

Dirigismo emerged in various forms after World War II, especially in economies undergoing reconstruction or trying to catch up with more advanced rivals. France is commonly cited as a classic example, but the approach also appeared in other European economies and in parts of Asia and the developing world, each adapting the basic idea to its political and economic context.

Critics argue that dirigismo can generate inefficiency, misallocation, and fiscal burdens, and may crowd out private initiative. Proponents contend that state guidance helps overcome market failures, mobilize long-term investment, and coordinate large-scale projects that markets alone cannot efficiently achieve. In contemporary discourse, dirigismo is often discussed alongside debates about state-led development and industrial policy.