Constitutions and Political Economy: The Privatisation of Public Enterprises in France and Great Britain

DOIhttp://doi.org/10.1111/j.1468-2230.1990.tb01814.x
Date01 May 1990
Published date01 May 1990
Constitutions and Political Economy: The Privatisation
of
Public Enterprises in France and Great Britain
Tony
Prossee
Introduction
This article will be concerned with the effects of differing constitutional traditions and
constitutional provisions on policy -making and on policy-delivery
,
as suggested by a
comparison of the implementation of the programmes of privatisation of public enterprises
in France and Great Britain. This should provide a particularly useful case study for students
of comparative law and politics, as both nations adopted extensive privatisation with the
ascent to power of governments of the Right; indeed, the earlier British privatisation
programme offered an important source of inspiration for France. However, there have
been major differences in the nature of the enterprises to be sold, in the means of evaluation
and share pricing adopted and in relations with government after privatisation.
I
will
concentrate on discussion of France, referring
to
Britain for comparative purposes, as
material on British experience is more easily available. Indeed, in some ways this article
can be seen as complementing earlier work done in this journal by myself and a colleague
on the constitutional implications of privatisation on this side of the Channel.’
A
number of different aspects of the comparative privatisation process will be of interest
to lawyers. Thus, for example, the legal forms and instruments adopted have been very
different in the two nations, and this raises themes receiving increasing attention in valuable
recent studies of law as an instrument of economic policy.2 However, this type of
comparison will not be made here.3 Rather, the central theme
will be
the degree to which
the different constitutional arrangements of the two nations have imposed constraints on
the freedom of manoeuvre
of
governments implementing their privatisation programmes,
and, in particular, the degree to which they have succeeded in imposing some degree
of
public scrutiny on the process of policy implementation. In particular,
I
will examine the
role of the written constitution as interpreted by the Conseil constitutionnel in France in
imposing structural constraints on the relationship between governmental policy and broader
conceptions of public interest and citizenship.
In
examining
this
subject, one finds a major theme
in
the literature of comparative political
economy to be that different patterns of economic development in the two nations can
be ascribed in part to differences in the role and organisation of the state. Thus Shonfield,
in his pioneering and influential study, associates economic liberalism with a particularly
British type of capitalist development:
Classical economics,
which
was largely a British invention, converted the British experience
. .
.
into something very like the Platonic idea of capitalism. Out of Ricardo’s preference for
‘strong cases’, there came the picture
of
a perfect market, unimpeded
by
the influence of any
public
author it^.^
*Faculty of Law, University of Sheffield.
The work
on
France was largely carried out when
I
was a
Jean
Monnet Fellow at the European University
Institute, Florence, and
I
am
grateful for this
support.
I
would
also
like to thank Professor John Bell for assistance
with supplying materials. Translations are my own.
Cosmo Graham and
Tony
Prosser, ‘Privatising Nationalised Industries: Constitutional Issues and New
Legal Techniques’ (1987)
50
MLR 16.
Daintith, (ed)
Law
as
an Instrument
of
Economic Policy: Comparative and Critical Approaches,
(Berlin,
de Gruyter, 1988).
For
an
analysis of the
legal
forms used for privatisation,
see
C.
Graham
and
T. Prosser,
Privarising Public
Enterprises:
A
Comparative Study
(Oxford University Press, forthcoming).
Shonfield,
Modem Capitalism,
(Oxford University Press, 1965). p71.
I
2
3
4
304
nte
Modern Law Review
53:3
May
1990
0026-7961
May 19901
Constitutions and Political
Economy
By contrast, France was characterised by an ‘ktatist’ tradition:
The essential French view, which goes back to well before the Revolution of 1789, is that the
effective conduct of a nation’s economic life must depend on the concentration of power in the
hands of a small number of exceptionally able people, exercising foresight and judgement of
a kind not possessed by the average successful man of business. The long view and the wide
experience, systematically analysed by persons of authority, are the intellectual foundations of
the system. The design and efficiency of the machine
of
government then determine the degree
of practical success a~hieved.~
Thus ‘[tlhere is no doubt that the British way makes for an unpompous state, a state which
embarks on any venture with an intense consciousness of its own limitations
. . .
but its
inhibitions also make it less active in pursuit of positive social goals.’6 Moreover, the
French penchant for the drawing up of national plans has also contributed to the image
of a nation in which the state takes a far more central role in the purposive process of
economic management. Much more recently, Hall has compared (in somewhat qualified
terms) the state-led growth of France with the more market-oriented pattern of economic
development in Britain.’ Indeed, it is striking when examining the rhetoric of privatisa-
tion in the two nations that the treatment of the state has been different; thus whereas
in
Britain stress
has
been laid on the ‘rolling back of the frontiers of the state’ as a justification
of privatisation,* care has been taken in official statements in France to avoid the
suggestion that it represents a weakening of the state’s role; to quote the Minister of Finance
largely responsible for the privatisation programme:
The dynamism of our society assumes the existence of a strong state, confident of its mission.
It
is incompatible with
an
all-embracing state substituting itself for economic actors. That is
why the privatisation programme was needed.g
It must straightaway be admitted that any conception of France as a nation of a strong
state as compared to the relatively stateless society of Britain represents a gross over-
simplification of a highly complex reality. Indeed, a recent survey of comparative
government-industry relations has rejected the dichotomy of nations into those with strong
and weak states as ‘positively misleading’ through disguising common sets of informal
relations and influence and as creating a false sense
of
coherence and consistency as regards
state actions.
lo
Moreover, recent changes in national politics have created an
unprecedented degree of centralisation in British government, whilst
in
France some degree
of decentralisation has taken place, and more importantly, many older instruments of
economic management have been abandoned in favour of more market-oriented relations.
As
a result, at least some credence can be given to the recent claim of the French Minister
of Industry that the image of French governments as interventionist is no longer
justified.
II
Nevertheless, the analysis
of
France as traditionally a nation characterised by a greater
degree of state intervention than Britain suggests a preliminary hypothesis that governments
would find themselves relatively untrammelled in the implementation of economic policy;
certainly in the past an impressive range
of
instruments were available to them for this
purpose.
I2
However, when one comes to consider other differences between the concept
-
5
6
7
8
9
10
11
12
ibid
pp71-2.
ibid
ppll9-20.
Hall, P.
Governing the Economy,
(Cambridge, Polity Press, 1986): see also Hayward,
The State and
the Market Economy,
(Wheatsheaf, Brighton, 1986).
For
example in the famous Bruges speech: ‘We have not successfully rolled back the frontiers of the
state in Britain,
only
to
see
them reimposed at a
European
level’,
7he Financial
limes,
21
December 1988.
Journal Officiel, Assernbk Nationale, 27 octobre 1987, 4893.
Wdks and Wright,
Comparative Government-Industry Relations,
(Oxford, Clarendon Press, 1987).
Le
Monde,
6 juin 1989.
Hall,
op
cit
esp. 151-5.
305

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