Published in L\u2019Opinion, December 2, 2025<\/p>\n\n\n\n
The paradox of the French social model becomes clear in the accumulation of striking figures: according to the latest OECD data, France holds the European record for mandatory levies and public spending, with more than 32% of GDP in direct social transfers. And the consolidated weight of public expenditure far exceeds that of its neighbors\u2014sometimes by nearly ten points of GDP. Yet it seems particularly difficult for public authorities to reduce spending and quite easy to increase taxes, such is the pressure not to touch the former and the almost paroxysmal demand for fiscal justice. One might therefore conclude that it is useless, or even dangerous, to change a model that appears effective and that everyone seems eager to preserve. And yet\u2026<\/p>\n\n\n\n
And yet these deep-seated political tendencies fail to confront the rising and unsustainable cost of our model. The deficit has become almost permanent: France posts a significant primary deficit every year, even as the interest burden\u2014thanks to higher rates\u2014has become one of its largest budget lines, and as the public-debt ratio has risen about three times faster than in the rest of the euro area since 2000. This places the country\u2019s ability to finance this societal choice at serious short- and medium-term risk. The Governor of the Banque de France and the IMF now warn of a major sustainability problem, while fiscal room for manoeuvre shrinks as revenues stagnate and the working population declines relative to the number of retirees, owing to demographic trends.<\/p>\n\n\n\n
And yet, on the purely economic front, the picture is no more reassuring. The evolution of GDP per capita over the past twenty years shows a gradual French decline relative to more dynamic neighboring countries. While Germany, the Scandinavian countries, and the Netherlands continue to advance, France has been steadily losing ground in the ranking of wealth created per inhabitant. This productive weakening is also evident in the low share of industry in national value added.<\/p>\n\n\n\n
And yet 78% of French citizens now consider the level of taxes and social contributions too high (according to the Compulsory Levies Council\u2019s barometer).<\/p>\n\n\n\n
The French paradox is also strikingly visible in the perceived effectiveness of public services. Although spending on health, education, and pensions is comparable to or higher than that of other universalist welfare states, the layering of administrative structures, normative inflation, and over-administration undermine the system\u2019s efficiency. The problem is glaring in the hospital sector, where administrative workloads are far higher than in Germany or Nordic countries, without yielding better outcomes for users. The same pattern exists in education, burdened by a heavy organization and struggling to ensure equity, even as international assessments such as PISA and PIAAC now place France at average or mediocre levels compared with high-performing countries across most key competencies. Multiple cost-effectiveness metrics from international organizations place France only in an average\u2014or even poor\u2014position in nearly all domains studied. And the share of citizens who say they trust and are satisfied with their public services stands at 52% in France, versus 66% on average across the OECD. The Compulsory Levies Council\u2019s latest barometer also shows that the share of French people who believe tax money is well used by the state has fallen by 11 points in two years\u2014from 33% to 22%. Should we really avoid changing anything and continue raising taxes and contributions?<\/p>\n\n\n\n
The declining effectiveness of French public policy calls into question the sustainability of the social compromise: although the model seeks to protect all citizens through very high taxes and one of the strongest redistribution systems in the OECD, it no longer provides sufficient social mobility\u2014income equality after redistribution is high, but equality of opportunity is far more debatable\u2014nor dynamic growth, nor even efficient and satisfactory public services.<\/p>\n\n\n\n
In the absence of structural reform, the continuous rise in public spending is accompanied by growing collective disillusionment. This paradox at the heart of the French model raises questions about its future and heightens the tension between the desire to preserve an ambitious social pact and the need to restore the means to ensure its effectiveness and sustainability over time.<\/p>\n\n\n\n
It is time to move beyond today\u2019s unrealistic debates and address France\u2019s structural difficulties head-on. They harm the country\u2019s economic and social health. And without action, sooner rather than later, they will undermine tax consent, the social pact, and national cohesion itself. The apparent paradox could thus swiftly turn into an economic and societal crisis.<\/p>\n\n\n\n
Olivier Klein
Professor of Economics, HEC<\/p>\n","protected":false},"excerpt":{"rendered":"
Published in L\u2019Opinion, December 2, 2025 The paradox of the French social model becomes clear in the accumulation of striking figures: according to the latest OECD data, France holds the European record for mandatory levies and public spending, with more than 32% of GDP in direct social transfers. And the consolidated weight of public expenditure […]<\/p>\n","protected":false},"author":1,"featured_media":9166,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[133,136],"tags":[],"class_list":["post-10228","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economical-and-financial-crisis","category-economical-policy"],"acf":[],"yoast_head":"\n