Recent Development in Public Finance Since the 2008-2009 Global Crisis

Abstract

The 2007/2008 global crisis has put into agenda a basic debate in the field of public finance in what concerns state intervention. The crisis shows the narrowness and inadequacy of current mainstream and neoclassical approaches related to subjects such as the specific forms of state intervention during the crisis as well as its origins and causes. None of these approaches perceive state intervention as an economic and social reality of the discipline of public finance. Although they provide some insightful discussions on the financial crisis, they remain essentially descriptive. New developments after the global crisis revealed spectacular alternative views by reinterpreting the forms of state intervention in economic theory as well as its applications in specific countries. In these views the state and its policies are determined and transformed socially, politically and historically. In this respect, we need to know more about the dynamics of the capitalist system, its economic institutions and the patterns of production relations in every conjuncture of economic history as well as the functioning of financial systems. This paper argues that the field of public finance is socially determined as any other scientific practice. Following the recent discussions in theory and its applications, this paper treats state intervention as both a "symptom" and a "cause" of critical changes in economy and society.