Some Reflections on the New Challenges Facing the Modern State

Abstract

The debate among economists over the scope of state intervention in economic processes has a long history. After periods in which laissez-faire theories were dominant, views that promoted the active participation of the state in economic life increasingly came to the fore. Economic theory and business practice, both subject to fluctuations, have sometimes preferred the first approach and sometimes the second. The modern state operates in an increasingly globalized, dynamic, and turbulent environment. This changeable environment, the diversity of development levels, and the emergence of new institutions urge a redefinition of its role in modern economies. This paper contributes to the debate on the challenges and economic role of modern state and identifies some of those challenges.