Banking on the King: The Evolution of the Royal Revenue Farms in France

Journal of Economic History, Vol. 66, No. 4, December 2006

Posted: 7 Jan 2008

See all articles by Noel D. Johnson

Noel D. Johnson

George Mason University - Department of Economics; George Mason University - Mercatus Center

Abstract

The writing and allocation of French tax farm contracts changed dramatically after the Fronde (1648-1653): they were gradually transformed from small, competitively auctioned, units into a large cartel known as the Company of General Farms. Surprisingly, the crown's revenues increased. I present a transaction cost argument to explain the behavior of tax farm lease prices as tax farming changed during the seventeenth century. Cartelization of tax farms lowered costs faced by the crown. The tax farm system's evolution offers insights into how organizations evolve to protect their property rights in the absence of well functioning representative institutions.

Keywords: Economic History, France, New Institutional Economics

JEL Classification: N23, D72

Suggested Citation

Johnson, Noel D., Banking on the King: The Evolution of the Royal Revenue Farms in France. Journal of Economic History, Vol. 66, No. 4, December 2006, Available at SSRN: https://ssrn.com/abstract=1081186

Noel D. Johnson (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

George Mason University - Mercatus Center

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Arlington, VA 22201
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