France charting a clearer way forward

194 Pages·2004·3.233 MB·English

by  OECD

«
OECD Reviews of Regulatory Reform
OECD Reviews of Regulatory Reform
FRANCE
CHARTING A CLEARER WAY FORWARD
FRANCE
Major reforms have been introduced into the regulatory governance system in France over the past 20 years. The role
ofthe State in the economy has been reduced as the State has distanced itself from direct intervention, and State
ownership of companies has declined significantly. The majority of product markets are now open to competition. The
definition and management of public services have been adapted accordingly. Decentralisation has affected the
apportionment of institutional responsibilities and powers between the State, regions, departments and communes.
CHARTING A CLEARER WAY
Public administrative law has evolved and now recognises, for example, the principles of competition as an important
factor in State decision making. There has been significant progress in facilitating access to regulatory information, in
FORWARD
particular through the use of new information technologies. Such progress has also been facilitated by a considerable
effort of codification. Structural reforms have gone hand in hand with the opening up of the French economy to foreign
trade. However, after a period of relative success at the end of the 1990s, there has been a recent slowdown in growth.
France, like other countries, faces the challenge of an ageing population. Although the reforms necessary to meet this
challenge have begun to be implemented, further adjustments are needed to sustain the progress of the French
economy and help strengthen its growth potential. This will require the government to set a clearer course with a more
coherent strategic direction, co-ordinating its approaches to product and labour markets and the system of governance.
France, like other member countries, has undergone a broad review of its national regulatory practices and internal
regulatory reforms. This review presents an in-depth evaluation, set within a macroeconomic context, of regulatory
reform including government capacity to produce high quality regulations, competition policy and market openness. It
also assesses progress in the civil aviation and telecommunications sectors.
The background material used to prepare this report is available at: www.oecd.org/regreform/backgroundreports.
In the same series: O
E
Regulatory Reform in Canada Regulatory Reform in Korea
C
Regulatory Reform in the Czech Republic Regulatory Reform in Mexico D
Regulatory Reform in Denmark Regulatory Reform in the Netherlands
R
Regulatory Reform in Finland Regulatory Reform in Norway
e
Regulatory Reform in Germany Regulatory Reform in Poland v
i
Regulatory Reform in Greece Regulatory Reform in Spain e
w
Regulatory Reform in Hungary Regulatory Reform in Turkey
s
Regulatory Reform in Ireland Regulatory Reform in the United Kingdom
o
Regulatory Reform in Italy Regulatory Reform in the United States
f
Regulatory Reform in Japan R
e
g
The policy starting point for these reviews is presented in the OECD Report on Regulatory Reform: Synthesis, and the u
supporting two-volume OECD Report on Regulatory Reform: Sectoral andThematic Studies, published in 1997. la
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ISBN 92-64-01546-9
42 2004 08 1 P -:HSTCQE=UVZY[X:
OECD Reviews of Regulatory Reform
France
CHARTING A CLEARER WAY FORWARD
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came
into force on 30th September 1961, the Organisation for Economic Co-operation and Development
(OECD) shall promote policies designed:
– to achieve the highest sustainable economic growth and employment and a rising standard of
living in Member countries, while maintaining financial stability, and thus to contribute to the
development of the world economy;
– to contribute to sound economic expansion in Member as well as non-member countries in the
process of economic development; and
– to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in
accordance with international obligations.
The original Member countries of the OECD are Austria, Belgium, Canada, Denmark, France,
Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries
became Members subsequently through accession at the dates indicated hereafter: Japan
(28thApril1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973),
Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland
(22nd November 1996), Korea (12th December 1996) and the Slovak Republic (14th December 2000).
TheCommission of the European Communities takes part in the work of the OECD (Article 13 of the
OECD Convention).
Publié en français sous le titre :
Examens de l’OCDE de la réforme de la réglementation
France
Vers des orientations stratégiques plus claires
© OECD 2004
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FOREWORD
Foreword
T
he OECD Review of Regulatory Reform in France is one of a series of country reports carried
out under the OECD’s Regulatory Reform Programme, in response to the 1997 mandate by OECD
Ministers.
Since then, the OECD has assessed regulatory policies in 20 member countries. The reviews aim
at assisting governments to improve regulatory quality –that is, to reform regulations to foster
competition, innovation, economic growth and important social objectives. It draws on two
important instruments: the 1995 Recommendation of the Council of the OECD on Improving
the Quality of Government Regulation andthe 1997 OECD Report on Regulatory Reform.
The country reviews follow a multi-disciplinary approach and focus on the government’s
capacity to manage regulatory reform, on competition policy and enforcement, on market openness,
and on the regulatory framework of specific sectors against the backdrop of the medium-term
macroeconomic situation.
Taken as a whole, the reviews demonstrate that a well-structured and implemented programme
of regulatory reform can make a significant contribution to better economic performance and
enhanced social welfare. Economic growth, job creation, innovation, investment and new industries
are boosted by effective regulatory reform, which also helps to bring lower prices and more choices
for consumers. Comprehensive regulatory reforms produce results more quickly than piece-meal
approaches; and they help countries to adjust more quickly and easily to changing circumstances and
external shocks. At the same time, a balanced reform programme must take into account the social
concerns. Adjustments in some sectors have been painful, but experience shows that the costs can be
reduced if reform is accompanied by support measures, including active labour market policies.
While reducing and reforming regulations are key elements of a broad programme of regulatory
reform, experience also shows that in a more competitive and efficient market, new regulations and
institutions may be necessary to ensure compatibility of public and private objectives, especially in
the areas of health, environment and consumer protection. Sustained and consistent political
leadership is another essential element of successful reform, and a transparent and informed public
dialogue on the benefits and costs of reform is necessary for building and maintaining broad public
support.
The policy options presented in the reviews may pose challenges for each country. However, the
in-depth nature of the reviews and the efforts made to consult with a wide range of stakeholders
reflect the emphasis placed by the OECD on ensuring that the policy options presented are relevant
and attainable within the specific context and policy priorities of the country.
Each review consists of two parts. Part I presents an overall assessment, set within the
macroeconomic context, of regulatory achievements and challenges across a broad range of policy
areas: the quality of the public sector, competition policy, market openness and key sectors such as
telecommunications. Part II summarises the detailed and comprehensive background reviews
prepared for each of these policy areas, and concludes with policy options for consideration which
OECD REVIEWS OF REGULATORY REFORM: FRANCE – ISBN 92-64-01546-9 – © OECD 2004 3
FOREWORD
seek to identify areas for further work and policy development in the countries under review. The
background reviews for France have been posted on the OECD Web site: www.oecd.org/regreform/
backgroundreports.
Acknowledgements. The horizontal Programme on Regulatory Reform is headed
by the Deputy Secretary-General Richard Hecklinger. The country reviews are co-ordinated
by the Public Governance and Territorial Development Directorate.
The Review of France reflects contributions from the Government of France, the
Working Party on Regulatory Management and Reform of the Public Governance
Committee, the Competition Law and Policy Committee and its Working Party, the
Working Party of the Trade Committee, The Working Party on Telecommunication and
Information Services of the Information, Computer and Communication Policy
Committee; representatives of member governments, and members of the Business
and Industry Advisory Committee (BIAC) and the Trade Union Advisory Committee
(TUAC), as well as other groups.
In the OECD Secretariat, Odile Sallard, Rolf Alter, Josef Konvitz, Cesar Córdova-
Novion, Caroline Varley, Andrew Burns, Stéphane Jacobzone, Rainer Geiger, Michael
Wise, Patricia Heriard-Dubreuil, Anthony Kleitz, Evdokia Moïsé, Roya Ghafele,
Philippe Gugler, Dimitri Ypsilanti asisté de Frédéric Bourassa, and Marie-Grâce Lux,
contributed substantially to the review of France. The document was prepared by
Jennifer Stein.
4 OECD REVIEWS OF REGULATORY REFORM: FRANCE – ISBN 92-64-01546-9 – © OECD 2004
TABLE OF CONTENTS
Table of Contents
Summary................................................................................................................................ 9
Part I
Regulatory Reform in France
Chapter 1. Performance and Appraisal............................................................................ 25
Introduction..................................................................................................................... 26
Setting the scene: the macroeconomic background to regulatory reform ............ 29
Regulatory reform: its contribution so far................................................................... 33
Regulatory reform: the challenges................................................................................ 53
Conclusion........................................................................................................................ 80
Part II
Regulatory Policies and their Results
Chapter 2. Regulatory Governance.................................................................................... 85
Context and history........................................................................................................ 86
Regulatory policies.......................................................................................................... 89
Regulatory institutions .................................................................................................. 90
Regulation at different levels of government............................................................. 92
Regulatory transparency................................................................................................ 93
Regulatory Impact Analysis .......................................................................................... 98
Keeping regulation up to date and improving the business environment............. 99
Conclusion........................................................................................................................ 101
Policy options for consideration................................................................................... 103
Chapter 3. Competition Policy........................................................................................... 107
Competition policy foundations................................................................................... 108
Substantive issues: the content of the competition law........................................... 110
Institutional issues: structures and enforcement...................................................... 113
The limits of competition policy: exemptions and special regulatory regimes..... 115
Competition advocacy for regulatory reform.............................................................. 120
Conclusion........................................................................................................................ 120
Policy options for consideration................................................................................... 122
Chapter 4. Market Openness.............................................................................................. 125
General context............................................................................................................... 126
The general policy framework for market openness: the six efficient
regulation principles....................................................................................................... 126
OECD REVIEWS OF REGULATORY REFORM: FRANCE – ISBN 92-64-01546-9 – © OECD 2004 5
TABLE OF CONTENTS
Assessing results in selected sectors........................................................................... 132
Conclusion........................................................................................................................ 134
Policy options for consideration................................................................................... 136
Chapter 5. Civil Aviation: Structures, Reforms and Performance............................... 139
Civil aviation in France................................................................................................... 140
Regulatory reforms of passenger transport services................................................. 141
Regulatory reforms of airport management............................................................... 147
Ground services............................................................................................................... 150
Regulatory reforms of air traffic control...................................................................... 153
Conclusions...................................................................................................................... 157
Policy options for consideration................................................................................... 158
Chapter 6. Telecommunications........................................................................................ 163
History and current context ......................................................................................... 164
Market features............................................................................................................... 166
Regulatory structures and reform................................................................................ 169
Conclusions...................................................................................................................... 185
Policy recommendations................................................................................................ 187
Appendix................................................................................................................................. 189
Bibliography............................................................................................................................ 199
List of Boxes
1.1. What is regulation and regulatory reform?............................................................ 34
1.2. Evaluating the potential impact of 35hour work week legislation..................... 37
1.3. Independent regulators in France............................................................................ 39
1.4. The French legal system and the Conseil d’État...................................................... 44
1.5. The decentralised French State................................................................................ 46
1.6. Improving the State-citizen relationship................................................................ 48
1.7. Administrative simplification reforms in2003...................................................... 49
1.8. E-government: what it can do for better government.......................................... 51
1.9. The six “efficient regulation principles”.................................................................. 53
1.10. What are the likely benefits of further labour market reform?........................... 55
1.11. Public service............................................................................................................... 61
1.12. The State and the economy: progress towards the “regulatory State”............ 64
1.13. French co-ordination mechanisms for the EU....................................................... 68
1.14. Services of General Economic Interest: the French proposals............................. 70
1.15. Consultation and transparency in Canada............................................................. 73
1.16. The2003 decentralisation reform............................................................................ 76
6.1. Milestones in France’s telecommunications policy and regulation.................... 165
6.2. France Télécom........................................................................................................... 167
6.3. The new telecommunications act will transpose EU Directives......................... 182
List of Tables
1.1. Organisation and definition of the public sector in France ................................ 28
1.2. Gross domestic product per capita breakdown ..................................................... 54
1.3. Public enterprises in2000 ........................................................................................ 62
6 OECD REVIEWS OF REGULATORY REFORM: FRANCE – ISBN 92-64-01546-9 – © OECD 2004
TABLE OF CONTENTS
5.1. Operating margins and wage bill burdens for FY2001-02 .................................... 145
5.2. Load factors in 1Q2003 ............................................................................................. 146
5.3. Financial position of the main airports .................................................................. 150
5.4. Status of air traffic control bodies in Europe ......................................................... 154
5.5. Delays in France (1997-2000) in half-minutes ....................................................... 156
5.6. A comparison of the number of IFR flights controlled
and of staff numbers between France, Germany
and the United Kingdom in2000 ............................................................................. 156
5.7. Comparison of the number of Unites of Service controlled
and of staff numbers between France, Germany
and the United Kingdom in2000 ............................................................................. 156
5.8. Unit cost of route charges of EU countries at 1January2003 ............................. 157
6.1. Distribution of revenues in the French telecommunications market, 2002 ..... 183
Appendix
A.1. Reform of sectoral economic regulations in France ............................................. 190
A.2. Potential impact of the reform of sectoral regulations ........................................ 194
List of Figures
1.1. Structure of the economy.......................................................................................... 26
1.2. Real GDP growth in France, the euro zone and elsewhere in the OECD............. 29
1.3. Macroeconomic policy, interest rates and investment......................................... 30
1.4. Labour market developments................................................................................... 31
1.5. Long-term growth trends.......................................................................................... 32
1.6. Relative labour cost and take-home pay at the SMIC........................................... 35
1.7. Delay in transposing directives regarding the single market.............................. 69
1.8. Administrative burdens on start-ups...................................................................... 71
1.9. Public spending in the international perspective.................................................. 77
1.10. Slippage in multiyear targets.................................................................................... 78
OECD REVIEWS OF REGULATORY REFORM: FRANCE – ISBN 92-64-01546-9 – © OECD 2004 7
ISBN 92-64-01546-9
OECD Reviews of Regulatory Reform: France
Charting a Clearer Way Forward
© OECD 2004
Summary
OECD REVIEWS OF REGULATORY REFORM: FRANCE – ISBN 92-64-01546-9 – © OECD 2004 9
SUMMARY
The French economy has been relatively successful
in recent years…
France is the fourth or fifth largest economy in the world in terms of GDP and enjoys a high
standard of living with a GDP per capita of EUR 24759 in 2002. The economy is highly
diversified with a broad manufacturing base and a large service sector. International trade
plays an important role, accounting for some 29% of GDP.
Economic performance has recently improved, following slow growth and recession in the
early 1990s. After 1995, when growth picked up, France outperformed all the large
continental European countries and the Eurozone average. Though the economy has
experienced a significant slowdown, the outlook remains slightly more favourable than in
some other large economies.
… thanks in part to structural and regulatory
reforms
This good performance was supported by a wide range of important structural, regulatory
and other reforms undertaken in the 1980s and 1990s. Major structural adjustments were
made to product markets. A long and ongoing process to open the capital of public
enterprises substantially reduced direct state ownership, bringing into private hands the
major share of the banking, insurance and manufacturing sectors. The liberalisation of
network industries and the introduction of new regulatory frameworks fostering
competition were also initiated. Competition policy started to have a stronger influence,
following the abolition of price controls and the establishment of an independent
competition authority. OECD research shows that market reforms undertaken in France
during the 1990s have had significant impacts on productivity, overall economic activity
and, not least, the labour market.
Labour market conditions reveal contrasts
The performance of the French labour market deteriorated throughout the 1970s and
1980s, more so than elsewhere in the OECD. The strong growth of employment during the
1990s owes much to efforts to reduce the labour costs of unqualified workers. Nevertheless,
the French labour market still faces a double challenge, with low rates of participation
among younger and older workers, and an increase in unemployment. The 1990s, to be
sure, saw a reversal in the trend decline in youth employment rates. On the other hand, the
low level of employment of older workers can be related to the policies carried out from the
mid-1970s to the mid-1980s.
These policies, which included early retirement programmes, were based on the
hypothesis, now discredited, that early retirement of older workers would make way for
10 OECD REVIEWS OF REGULATORY REFORM: FRANCE – ISBN 92-64-01546-9 – © OECD 2004