Description:

Victor Gay (TSE): "Weapons of Mass Production. World War I and the Modernization of the French Economy.” (joint work with Anne Alonzo and Ronan Tallec).
 
Abstract: During World War I, annual government spending in France reached unprecedented levels, accounting for 50 percent of pre-war GDP. A significant portion of this spending was allocated to support war industries at a time when the country's industrial cradle in the North-East was unavailable for production. Using original archival data on war procurement contracts, we examine whether these substantial but temporary wartime industrial investments fostered the modernization of the French economy during the interwar period. We find that regions that benefited from relatively more wartime industrial investment experienced a sustained postwar expansion of their manufacturing sector. This expansion was driven by a reallocation of the labor force toward manufacturing within rather than across regions, as well as increased industrial concentration. In contrast, we find little evidence that the war induced capital deepening and technological change.