Dirigisme (derived from the French verb diriger, meaning “to direct”) is an economic system where the state plays an active, directive role in guiding the market rather than acting merely as a regulator. It relies on tools like indicative planning, subsidies, and state-owned enterprises to align private businesses with national goals
While the term has occasionally been applied to centrally planned economies, where the government effectively controls production and allocation of resources (in particular, to certain socialist economies where the national government owns the means of production), it originally had neither of these meanings when applied to France, and generally designates a mainly capitalist economy with strong economic participation by government. Most modern economies can be characterized as dirigisme to some degree – for instance, governmental action may be exercised through subsidizing research and developing new technologies, or through government procurement, especially military (i.e. a form of mixed economy).
The term has subsequently been used to classify other economies that pursued similar policies, such as Japan, the East Asian tiger economies of Hong Kong, Singapore, South Korea and Taiwan; the economy of China after the reform and opening up, Indonesia and India after the opening of its economy in 1991.