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

Published online by Cambridge University Press:  28 November 2006

Noel D. Johnson
Noel D. Johnson
Affiliation:
Assistant Professor, Economics Department, California State University, 1250 Bellflower Blvd., Long Beach, CA 90840-4607. E-mail: njohnso3@csulb.edu.
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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.

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ARTICLES
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The Journal of Economic History , Volume 66 , Issue 4 , December 2006 , pp. 963 - 991
Copyright
© 2006 The Economic History Association

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