Mercantilism and bureaucratic modernization in early eighteenth‐century France

Abstract

French mercantilism is generally associated with absolutist policy‐making subject to capture by rent‐seeking interests. This article investigates how the Bureau du Commerce, a small state agency in charge of commerce and the supply side, handed out rents and privileges to private entrepreneurs. We coded how the Bureau investigated and decided all 267 voluntary submissions received between 1724 and 1744. It is shown that the Bureau’s formal, rule‐based decision‐making process could actually differentiate between alternate policy aims and target them consistently over time, with more or less powerful sets of rents. From this, a hierarchy of revealed policy preferences is derived. First comes technical innovation and diffusion, then local economic development; import substitution is only in the third position, followed by consumers’ welfare. Lastly, and in contrast to a long line of authors, it is shown that the production of luxury goods was not a significant or valued objective.

Why Are Modern Bureaucracies Special? State Support to Private Firms in Early Eighteenth-Century France

“…But the Bureau de Commerce also handed out tax exemptions or production monopolies to chosen firms, so as to foster economic development. In this sense, it implemented an early form of industrial policy, broadly based a mercantilist world-view (Beuve, Brousseau, and Sgard 2017).…”