The Political Economy of French Foreign Exchange Control

This paper aims at explaining the evolution of foreign exchange control depending on the weights of social layers in the society and the administration, based on the French case during the 20th century. It first tests Krueger and Bhagwati's thesis. They found that foreign exchange control in emerging countries in the 1950s and 1960s was a centralized State policy which was progressively captured by rent-seekers. I show that, on the contrary, in the case of a developed country, French foreign exchange control went from the expression of the interests of cartels and professional associations to a concerted and institutionalized State policy