In development studies, statism means the direction and control of economic and social affairs by the state. The practices included: investment in public enterprises; centralized economic planning; the regulation of employment; and other price‐distorting interventions in the market. The economic aims are to promote industrialization and protection against foreign competition; politically, the state and the government might gain in domestic legitimacy. Inspired more by nationalism than by socialism, statism is compatible with state capitalism. Since 1980 statism has been challenged by economic liberalism and structural adjustment reforms. Statism is also referred to as dirigisme and étatisme. France and Japan were classic statist examples.