France is not a socialist country, at least based on the technical definition.

Business largely are not owned and run by the government. Prices generally are determined by competition rather than by bureaucrats. And private investment mostly guides the economy rather than central planning.

That being said, France suffers from an enormous fiscal burden. Indeed, it is one of the world’s most-unfree nations when looking at fiscal policy.

The problem began in the 1960s, as it did in many European nations, when imposition of value-added taxes enabled a big expansion of the welfare state.

The election of President Mitterand in 1981 also was a contributing factor. That’s what Professor Louis Rouanet hypothesizes in some academic research published in 2022.

Here are some excerpts.

The attempt to implement democratic socialism in France following Francois Mitterrand’s election in 1981 is directly responsible for France’s economic underperformance since. …In June 1981, after the legislative elections, the new socialist government started implementing their program by raising family allowances by 25%, increasing pensions by 20%, and increasing the minimum wage in real terms. Public employees’ wages were increased. In addition, the government created 240,000 public sector jobs between 1981 and 1983 (Daniel, 2017). The progressivity of taxes increased, and a wealth tax for those owning more than 3 million Francs was enacted. Concerning the labor market, the statutory working week was reduced from 40 to 39 hours, and the retirement age was decreased to 60. …To investigate the effect of Mitterrand’s election on the French economy, we use the synthetic control method… Mitterrand’s election had a sharp, negative, and persistent impact on the French economy. By 1996, French GDP per capita (in 2017 $) was around $7,300 (20.5%) less than that of our synthetic counterfactual. During that same year investment measured by gross capital formation as a percentage of GDP was more than 6 percentage points lower compared to the synthetic counterfactual. The number of hours worked per capita per year declined by 81 hours. The employment rate fell by more than 2 percentage points. Government consumption increased by more than 4 points, as a percent of GDP, by the end of the 1990s. …Mitterrand’s brand of democratic socialism had a negative causal effect on the French economy. Not only was this effect pronounced, it was also persistent.

Here are some charts from the study showing the impact of Mitterand’s statism.

We’ll start with most depressing chart, which shows how growth lagged after his election.

Next we have a chart looking at how Mitterand’s policies affected labor supply.

As you can see, hours worked per capita fell significantly.

One reason from the bad economic outcomes was Mitterand’s expansion of the French budget.

Figure 5 shows a big increase in the burden of government spending.

The good news is that some of Mitterand’s bad policies were somewhat curtailed after French politicians realized they had gone overboard.

The bad news is that the net effect was nonetheless bigger government. And that continues still today, more than 40 years later.

Indeed, French policy seems to get a little worse with each passing year. This won’t end well.