Thursday, November 29, 2007

FRANCE'S STREET RIOT SHOWDOWN

Weak property rights, excessive government burden and the lack of rule of law have led to street riots in France. The Economist has published an article describing how French rioters are destroying private property and public means (link).

2 comments:

Dr. T said...

This is not surprising. Do you think Sarkosy understand this is the source of the problems and will do something about it? I hope so.

Rocks said...

Decades of low growth, wage-increasing pressures, welfare state, low productivity and huge public sector created a bulk of structural problems. There's also an empirical evidence that high tax burden and state entrepreneurship result in the lack of rule of law and weak property rights.

It is admirable to see economic and structural reforms proposed by Sarkozy coming along. I hope that Sarkozy will impose the reforms to invigorate rigid labor market and reduce welfare dependency respectively. There're two economic diseases that France currently has: low growth and excessively regulated labor market that causes structural unemployment, especially among the youth. The question is not "if" reforms should be implemented. The question is "when" and the answer is as soon as possible. In fact, there's no other choice for France except for long-term stagnation and low output.

Regards,
Rocks