The Role Of The State

Question 1

What is the economic role of the state

Answer 1

A structuring agent providing legal and financial framework

Question 2

What is the role of the state on a continuum of intervention

Answer 2

Limited- macroeconomic policies aimed at maximising long term growth
Less limited- fosters and participates in a more collaborative partnership between economic actors
Explicit intervention- usually based on a need for economic development

Question 3

What is the current dominant narrative of the state

Answer 3

State intervention is not necessarily a good thing
State can’t do everything in markets and needs to get out of the way
Is it an enemy of enterprise?

Question 4

What is the Marxist perspective by Pirellis (2010)

Answer 4

Multinationals, market and state are compmentary devices for the exploitation of labour
Emphasis is on sectional interests
State can be captured

Question 5

What is the mainstream perspective ( Pirellis , 2010)

Answer 5

Firms market and the state are complementary and substitutional methods of resource allocation and works where they work best

Douglas north- states role is to maximise rents for the ruler in exchange for services

Question 6

What is the regulatory state

Answer 6

System of regulation
Not about the state replacing the market
State is a steerer not a rower - osbourne and gabler

Question 7

What are the foundations of the regulatory state

Answer 7

Rises out of the new deal as a response to robber baron companies and wall street crash

Question 8

What is the US regulatory state

Answer 8

Key institutions created
Regulation is formed in conjunction with business
State should only get involved in broader framework by statute. If statute is broken the full power of the legal system is at the heels of business

Eu
Ambiguity between bus friendly
More command and control economy
Broader guidelines and belief the state is neutral

Question 9

What is the entrepreneurial sate

Answer 9

Looked at the relationship between financial innovation and growth
Private sector only has the courage to invest after the government system has made the risky investment

By not admiring the role of the state we are socialising the risks of innovation whilst privatising the rewards

Question 10

What does mazzucato argue

Answer 10

Busts myth that venture capitalists are risk loving
We live in a knowledge economy
Parents restrict knowledge flows
Uk tax gap is 120bn the same as our budget deficit

Question 11

What is the austerity state

Answer 11

Appeared in 2010
Government exiting from spending any money
Austerity state is a short term solution
Dysfunctional conflict between creditors and citizens

Question 12

What does Moran (2010) argue

Answer 12

Regulator is a balance keeper, keeping the system in equilibrium

At the heart of the new regulatory state is federal regulatory agencies
Ensured there was a great deal of cooperation with business, being encouraged to take responsibility for running their own regulatory affairs

Adversarial legalism- the willingness to impose penalties on enterprises for breaches of regulations

Question 13

What is Morgan’s analogy of the US regulatory state

Answer 13

The corporation is confronted with a two headed beast, one with a smiling face representing consultation and the other snarling representing suspicion and determination to settle disputes in courts

Question 14

What does mazzucato say about some of the problem of the entrepreneurial state

Answer 14

Instead of throwing money at life sciences or IT we must first correct some of the dysfunctions in these sectors
Where is the future in such a system of socialised risk and privatised reward
Need a financial risk reward dynamic

Question 15

What does mazzucato suggest as a new framework

Answer 15

The state should earn back a direct return on its risky investment
These returns can be used to fund the next round of investments and inevitable failures
The government should obtain its fair share of IPR and a national innovation fund
Income contingent loans and equity
E.g google should pay back a percentage due to the public agency that funded its algorithm

Question 16

What does mazzucato say about the risk takin state

Answer 16

Each major technology has led to creative destruction - they have destroyed as much as they have created
Investment in basic research is a typical example of a market failure - market does not produce enough so government should step in
In US public sector spending accounts for 57%
Gov actively creates markets not just fixes them

Large scale and long term government investment has been behind almost every general purpose technology -88% have been dependant on federal research support

Question 17

What does Majone say in his video

Answer 17

Anti trust is negative law
Regulation does not prevent certain negative consequences
Less risky if role of the state is limited to regulation
Politicians have limited time horizons - problem of time inconsistency
Make central bank l independent to solve this problem in 80s/90’s
Can be sure long term goals are better pursued

Question 18

What does mazzucato say about the risk taking state

Answer 18

Each major technology has led to creative destruction
Investment in basic research is a typical example of a market failure
In the US public sector spending accounts for 57% of basic research

88% of most important general purpose technologies have been dependant on federal research support

Question 19

What does streek say (2017) about the tax state to debt state

Answer 19

The selfish nature of elected representatives will lead politicians to give off the impression the pool in inexhaustible and to get re-elected will spend more than the government raises

State has a tendency to fall short in extracting from a society of private owners the means it requires to perform its growing tasks

Globalisation forced governments into a fiscal competition with one another and pushed them to lower top rates of corporation tax

Question 20

What does streek say about the transformation from a tax state to debt state

Answer 20

State covers large amounts of its expenditure through borrowing rather than taxation

Debt state may be understood as a retarding factor of the tax state

Those who have profited most have been paying too little, while people at the bottom suffer the he consequences