Abstract. French dirigisme since World War II has been identified at four levels: economic planning; the dominance of a neo-colbertisre civil service elite; Gaullism and the Fifth Republic; and a state-led, credit-based system for financing industry. The last of these was seen by Zysman (1977, 1983) as the strategic core of dirigisme, as in Japan, through state control of industrial purse strings. Paradoxically, it was the Socialist Governments of 1981–86, in response to deregulation elsewhere, which initiated extensive capital market reforms intended to replace the state-led, credit-based system with an ‘arms-length’ financial market system. These continued under the right-wing Chirac Government. However, the reform process itself has been state-led rather than market-led; and both rigidities in the markets and shortcomings in the reforms have been highlighted by the October 1987 crash. Much dirigisme of a tactical kind remains, but the state's potential for strategic intervention has been reduced.