The Regulation of Market Access in 18th Century Mercantilist France
Abstract: The reforms that marked the early period of the reign of Louis XIV (1661-1715) were predicated i.a. on the marginalization of both the traditional representative institutions and the aristocracy. In-between a new model of centralized bureaucratic State emerged that was based partly on meritocratic principles, and partly on patronage and the farming out official positions. From this original set-up emerged the mercantilist project of Colbert (1661-1683), which aimed was to develop a diversified manufacturing basis and an integrated domestic economy. This included a tight control over market entry and the distribution of more or less extended Privilèges to industrial entrepreneurs. We have coded 90 such decisions, made by the Bureau de Commerce between 1724 and 1729. The early conclusions are: (i) The decision making process was explicitly plural and formalistic: the higher bureaucrats wanted to make sure that each stakeholder to each individual case could defend his interest within a collective deliberation; then they typically confirmed the outcome of this collective iteration, without considering its substance. (ii) The revealed hierarchy of bureaucratic preferences was to first support technically innovative projects, then those which would have a positive impact on the trade balance, and lastly those that served local/ regional markets. (iii) We identify the specific policy preferences of the main parties to this decision-making process: local financial intendants, the top bureaucracy, and the 12-14 Députés du Commerce, i.e. part experts/ part representatives of the largest commercial cities. (iv) However the main sources of rents in the economy were off-limit: the Bureau had little say on the more sensitive issues like the tax farms, colonial trade or the state-sponsored trading companies (Compagnie des Indes, etc).
