EUR.INST: France's Slow Transition from Privatized to Government-Administered Tax Collection: Tax Farming in the Eighteenth Century

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                ABSTRACTS IN ECONOMIC HISTORY
                     (c) 2001 EH.Net
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Name: Eugene N. White
Email: white@economics.rutgers.edu
Institution: Rutgers University

Co-author: none

Title: France's Slow Transition from Privatized to
Government-Administered Tax Collection: Tax Farming in the
Eighteenth Century

Internet Address of abstracted work: not available

By mail:
Department of Economics
Rutgers University
New Brunswick
NJ 80901

Phone: 932-732-7486
Fax: 732-932-7416

Language: English

Abstract:
Among the institutions of the ancien regime, the Ferme Generale was
one of the most vilified by the Revolution. The fermiers were
depicted as a rapacious and tyrannical and paid the ultimate price on
the scaffold. Although there were contemporaries who defended the
institution, historians have generally accepted the revolutionaries
evaluation of the Ferme as an inefficient and corrupt. The purpose of
this essay is to re-examine the efficiency of this tax farm using the
literature on sharecropping and data from contracts with the tax
farms and their financial records. The tax farms of the ancien regime
present an example of the privatization of what is otherwise
considered to be an essential government function. The Ferme Generale
was given a monopoly over the collection of various taxes for a
period of years. Backed by an interest paying security bond, the
fermiers guaranteed the delivery of an annual lease price or bail to
the government for the right to obtain any profits in excess of this
sum. The Ferme was a heavy borrower in the money market, issuing
bills to meet its commitments to deliver funds to the government.
Over time as it became more willing to tolerate fluctuations in
revenue and more able to monitor officials, the Crown moved for
greater direct control of the Ferme and was clearly headed in the
direction of making it a government bureaucracy. However, progress
was slow and the government failed to make a complete transition, in
part, because of the entrenched political interests. If the
government had been able to switch to its own bureaucracy, it could
have gained substantial new revenues at a time when it was faced with
a large deficit.

Bibliography: White, Eugene N. "France's Slow Transition from
Privatized to Government-Administered Tax Collection: Tax Farming in
the Eighteenth Century." Manuscript, Rutgers University, 2001.

Subject: J,I
Geographical Area: 4
Country/Region: France
Time Period: 6

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