2006/11/28 by Noel D. Johnson · 3 citations
Arts and Humanities · Economics, Econometrics and Finance · Social Sciences · #Ad valorem tax #Argument (complex analysis) #Business #Cartel #Database transaction #Economics #European Political History Analysis #Finance #Historical Economic and Legal Thought #Historical Economic and Social Studies #Lease #Market economy #Revenue #Tax reform #Transaction cost
paper · doi:10.1017/s0022050706000398
openalex publication_date 2006/11/28 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/15
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.