Fiscal Crisis and Institutional Change in the Ottoman Empire and France

Abstract

Why is it that some countries adopted growth enhancing institutions earlier than others during the early modern period? We address this question through a comparative study of the evolution of French and Ottoman fiscal institutions. During the sixteenth century, both countries made extensive use of tax farming to collect revenue, however, uncertain property rights caused by fiscal pressure led to different paths of institutional change in each state. In France, tax collectors successfully overcame the collective action costs of imposing constraint on the king. In the Ottoman Empire, tax collectors faced prohibitive transaction costs to organizing in a similar manner.