---
title: "France Needs 45 Years to Grow Its Way Out"
date: 2026-01-21T09:41
author: Julien Reszka
description: "Cutting spending when you already spend 57% of GDP gives you six times less growth than the same cut at 20%. France is on the wrong part of the curve."
keywords: ["government", "strategy", "growth"]
canonical: https://julienreszka.com/blog/france-needs-45-years-to-grow-its-way-out/
---

# France Needs 45 Years to Grow Its Way Out

Cutting spending when you already spend 57% of GDP gives you six times less growth than the same cut at 20%. France is on the wrong part of the curve.

[Government Size Has No Sweet Spot](https://julienreszka.com/blog/government-size-has-no-sweet-spot/) showed that cross-country data fits a power law better than the Armey Curve. The curve falls monotonically as spending rises. That seems like good news: cut spending, gain growth.

![France at 57% spending sits on the flat end of the power law curve where cuts yield little growth](https://julienreszka.com/blog/france-needs-45-years-to-grow-its-way-out/curve.png)

The bad news is in the shape of the curve.

A power law is steep at low spending levels and flat at high ones. The marginal growth gain from cutting one point of spending is proportional to spending^(-(alpha+1)). With alpha = 1.5, the exponent on the marginal term is 2.5. A country at 20% spending gains roughly (50/20)^2.5 = about 6 times more growth from the same cut than a country at 50%.

Singapore at 15% would gain more still. France at 57% is near the flat end of the curve.

This creates a trap. The cure is real. The payoff is small. The disruption is large. That combination is what makes it politically impossible to cut.

Three paths out:

- Cut fast and deep: a large one-shot consolidation (10+ points) moves the country to a steeper part of the curve. Canada cut roughly 10 points in three years in 1995-1997.
- Hold spending flat and let GDP growth do it. The ratio falls by about 2% per year as a proportion when real GDP grows at 2%. This is the Sweden post-1993 playbook - and it took 15 years.
- Do nothing. The ratio stays high. Growth drag compounds. Debt rises. Future cuts become more expensive.

The math on the slow path is brutal.

France currently spends around 57% of GDP. At 0% real spending growth and 1.5% real GDP growth - optimistic for France's recent record - the spending-to-GDP ratio falls by about 1.48% per year as a proportion of its current level. To reach 30% takes roughly 45 years. To reach 20% takes over 90.

Canada and Sweden succeeded because they combined spending freezes with structural reforms that pushed real GDP growth above 2%. France has not done either.

The conclusion from the model is uncomfortable. Incremental annual cuts of 0.5 to 1 point are arithmetically real but economically invisible. They do not move the country far enough along the power law curve to produce a detectable growth response in a political cycle.

Cut fast, or wait 40 years. There is no comfortable middle path that produces visible results.

---

**Actionable insight:** When evaluating a fiscal consolidation plan, ask how many percentage points it moves spending and over how many years. A 1-point cut over 10 years in a high-spending country is noise. A 10-point cut in five years is signal.

## Key figure

**6x** — Times more growth a country at 20% spending gains from a 1-point cut compared to a country at 50%, derived from the power law fit with alpha=1.5

*Source: Derived from cross-country power law fit, World Bank data 2005-2023*

## Myth vs reality

**Myth:** Cutting 5 points of public spending delivers roughly 5 points worth of growth improvement

**Reality:** The power law is steep at low spending and flat at high spending. The same cut delivers six times less growth improvement at 50% than at 20%. France is on the flat part of the curve.

*Source: Power law model, R2=0.42, World Bank cross-country data 2005-2023*