Sunday, April 27, 2008

Rationalization


One thing that students of French history are taught is that the Revolution, whatever else it may have done, had a powerful rationalizing effect on French government, culminating a rationalization that had been under way for many decades under the Ancien Régime: a welter of conflicting legal regimes, disparate weights and measures, regional customs, dialects, etc. gave way to a modern, logical, functional, streamlined state efficiently administered from the top down. One sometimes has the feeling that it would take a revolution of similar magnitude today to clear up the confusion created by layer upon layer of legislation, by the residues of welfare and stimulus programs put in place for reasons that have been forgotten but that are all but impossible to eliminate because, once established, they acquire constituencies of beneficiaries and bureaucrats who have an interest in maintaining them. Then one had pays d'États and pays d'élections, la lieue de Paris et la lieue des Postes, le pied du Roi et le pied de Pérou, le livre parisis et le livre tournois; now one has a retirement system so complicated that no one can calculate what he or she can expect to receive at the end of a working life (see the Bozio-Piketty critique), and one has the latest proposal to finance the RSA by reducing the ceiling on the PPE.

What is this alphabet soup? The RSA is the Revenu de Solidarité Active, which is intended to eliminate disincentives to work; the PPE is the Prime pour l'emploi, which was established years ago as an incentive to work. So the reduction in one incentive to work is to be used to pay for the creation of another incentive to work. The ingenious budgetary arithmetic is no doubt admirable, and a better connoisseur than I am of the intricacies of these two labor market interventions might be able to explain the rationale for decreasing spending on the one in order to increase spending on the other, beyond the obvious fact that the PPE was the work of previous governments, hence no feather in the cap of this one, whereas the RSA has the presidential imprimatur, hence action on this front redounds to the glory of the head of state. Perhaps there are gains in equity; perhaps the target population of the RSA is more in need of assistance than that of the PPE; perhaps the aim is ultimately to phase out the PPE (and other incentives such as the RMI) altogether and replace it with a rationalized and transparent RSA. But all of this needs to be explained more clearly. In the absence of explanation, the budgetary legerdemain looks like an expedient intended to save a presidential promise rather than a policy with a persuasive logic behind it. Or am I missing something?