Institutional Performance and National Competitiveness: Lessons from the French Case

Abstract

This paper starts with a simple question : why an efficient country does not translate its potential through its economy. To answer such a question, we establish a coherent analytical link between institutional conversion efficiency and national competitiveness, Using the French economy as a  reference,  we compare institutional design from OECD (Organization for Economic Cooperation and Development)  evidence to illustrate why strong micro agents can coexist with weak aggregate performance. An answer comes from bureaucracy and discouraging fiscality. The analytical framework shows the ability of institutions to transform micro gains in social welfare. The empirical specification indicates that a slight correction in government efficiency determines sometimes a better productivity. The empirical illustration underlines the conversion mechanism  which depends on governance quality, fiscal coordination, and regulatory design.Through the concept of institutional dissipation we understand that the French case reveals how overlapping competencies, fragmented accountability, and regulation overload depress national competitiveness despite strong human capital.