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The interest group origins of the Bank of France

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  • Louis Rouanet

    (George Mason University)

Abstract

This paper contrasts different interpretations of the creation of the Bank of France. I argue that the Bank of France was the product of rent-seeking behavior rather than the pursuit of public interest, as is commonly supposed. I explain how the changing institutional constraints faced by both politicians and bankers can account for changes in France’s monetary constitution. The creation of the Bank in 1800 followed the fall of the Directory and the establishment of Napoléon’s autocratic regime. I argue that as parliamentarism and the separation of powers were weakened by Napoléon, the cost of establishing and maintaining a monopoly privilege in banking evaporated and the creation of the Bank of France became more likely.

Suggested Citation

  • Louis Rouanet, 2021. "The interest group origins of the Bank of France," Public Choice, Springer, vol. 186(1), pages 119-140, January.
    • Handle: RePEc:kap:pubcho:v:186:y:2021:i:1:d:10.1007_s11127-019-00765-6
    DOI: 10.1007/s11127-019-00765-6
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    Cited by:

    1. Rouanet, Louis, 2023. "Foutu maximum: The political economy of price controls and national defense in revolutionary France," Explorations in Economic History, Elsevier, vol. 88(C).
    2. Louis Rouanet & Peter Hazlett, 2023. "The redistributive politics of monetary policy," Public Choice, Springer, vol. 194(1), pages 1-26, January.
    3. Touria Jaaidane & Olivier Musy & Ronan Tallec, 2023. "Rent-seeking, reform, and conflict: French parliaments at the end of the Old Regime," Public Choice, Springer, vol. 194(3), pages 249-275, March.
    4. Bryan P. Cutsinger & Alexander Marsella & Yang Zhou, 2022. "Insuring legislative wealth transfers: theory and evidence," Public Choice, Springer, vol. 192(1), pages 127-144, July.
    5. Ennio E. Piano & Tanner Hardy, 2022. "Rent seeking and the decline of the Florentine school," Public Choice, Springer, vol. 192(1), pages 59-78, July.
    6. Cutsinger, Bryan P. & Rouanet, Louis & Ingber, Joshua S., 2023. "Assignats or death: The politics and dynamics of hyperinflation in revolutionary France," European Economic Review, Elsevier, vol. 157(C).

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    More about this item

    Keywords

    Central banking; Rent-seeking; Economic history;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913

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