Here’s a snippet from the paper “From Ancien Régime to Capitalism: The French Revolution as a Natural Experiment“, by Daron Acemoglu, Davide Cantoni, Simon Johnson & James Robinson:
In investigating the relationship between the collapse of the ancien régime and the rise of capitalism it is therefore important to recognize both the possibility of reverse causality and omitted variable bias. In the natural sciences the solution to a problem like this would be to conduct an experiment. For instance, we would ideally take a group of countries which were alike and randomly assign ancien régime institutions to some of them (the treatment group) while leaving unchanged the institutions of the rest (the ‘control’ group). Then we could observe what happens to the relative prosperity of these two groups. In reality, we cannot conduct such an experiment. Nevertheless, social scientists can take advantage of natural experiments which history sometimes offers. In the context of the decline of the ancien régime, the invasion of large parts of Europe by French armies following the French Revolution of 1789 provides a source of variation in institutions that can be used as a natural experiment. In this paper we argue that we can exploit this natural experiment as a way of estimating the effect of ancien régime institutions on economic growth.
Their answer? The ancien régime impeded economic growth.
Andrew Leigh's Archived Blog 2004-2010 
Hey Andrew,
Just having been to France, a short aside – a guy I know is working in INRIA – a french (govt) scientific institution, and he described its amazing non-meritorous career structure of low pay, low incentives to perform, and rising through the ranks on length of service rather than merit. Amazinglhy though, its career structure is better than the career structure of CNRS, another french govt scientific organisation. Unsurprisingly, people apparently often leave INRIA to work in a bank or private industry to earn more money.
It’s astonishing to think about how involved the french state is in its economy compared to the situation in Australia. There looks to be a lot of government involvement in industries, e.g. what are approved to be hotels or approved wine making processes. Most shops in Paris are closed Sunday.
There may be interesting “natural experiments” if Sarkozy introduces his “rupture with the past” policies.
Its not that bad in the CNRS Sacha,
There are four levels (CR1, CR2, DR1, DR2). You automatically get to the second by hanging around. You can’t get to the third without being reasonable, and you basically have to do some administration and be good to get to the fourth, which you won’t have to do for ever (and nor will you be allowed to — your time will run out, no matter how good you are — and you will no longer be lab director, even if you want to. This can have good and bad outcomes). This is no worse than the Australian university system, except that the system is not skewed towards people that generate money. So if you are good, but don’t pull in millions of dollars, you can still get to the top (thats good in my books, since it keeps good people that are not money machines in the system, and so you have a broader range of scientific people).
The problem is not so much people leaving, but useless people staying. If you don’t feel doing the slightest thing, you basically don’t have to. In addition, there is almost nothing anyone can do if you don’t, even if you do happen to have the skills to help someone else. As far as I can tell, where I have worked, around 30% of the scientific staff do zilch (in fact, its so bad, our lab director doesn’t given them any resources at all, including an office), and our admin staff don’t feel obliged to turn up more than 3 days a week. C’est la vie I guess, the rest of the people are very hard working and it means you have many full time science positions where people are not constantly bothered, which is one of the reasons why French science is better than the Australian equivalent in many areas (engineering, mathematics, …). Given that no-one wants to pay real wages for them, there needs to be some compensation, and this is done via having extremely good conditions.