Political cohabitation: when power-sharing strengthens public finances Research Publications
An op-ed by three professors from Rennes School of Business has been published in Les Échos under the title: “Les cohabitations politiques ont toujours amélioré les comptes publics” (“Political cohabitation has always improved the public accounts”).
Written by Stéphane Auray (CREST-Ensai and Rennes School of Business), Céline Azémar (Rennes School of Business) and Youenn Lohéac (Rennes School of Business), this contribution offers an analytical perspective on a topic at the heart of current economic and institutional debates: the effects of periods of political cohabitation on the management of public finances.
Rethinking political cohabitation
Periods of cohabitation in France have often coincided with an improvement in the public accounts. Despite varied economic contexts, they have encouraged structural reforms and more cautious budgetary management, curbing partisan excesses.
The authors recall that in situations where the President and the Prime Minister belong to opposing political camps, as during the Mitterrand–Chirac, Mitterrand–Balladur or Chirac–Jospin French cohabitations, the need for compromise leads to more balanced governance.
Reliability of agreements and strength of rules
Today, even without a clear majority, the system can remain stable, depending on how political actors handle the situation. Academic research indicates that, in this context, budgetary stability does not primarily depend on the number of political parties involved, but rather on the reliability of the agreements reached between them and on the strength of the rules governing budgetary decisions.
Their analysis, based on the study of how public debt and deficits have evolved over the decades, highlights the measurable effects of these periods of power-sharing on France’s budgetary stability.
In several European countries, this situation has led to the institutionalisation of interparty negotiation and cooperation in order to ensure more coherent and sustainable budgetary management.
A reflection at the crossroads of economics and governance
This publication is in line with the mission of Rennes School of Business: to shed light on major economic and societal issues through research.
It illustrates the role of professors in understanding the dynamics that shape public life and enrich democratic debate.
Through this analysis, the authors offer avenues for reflection to better grasp the interactions between the economy and political governance, while underlining the importance of institutional dialogue in the conduct of budgetary policies.
Read the full op-ed on the Les Échos website:
Les cohabitations politiques ont toujours amélioré les comptes publics
