Abstract

An open system perspective on State-economy relationships is outlined based on the concept of economic order and on Robert Delorme’s Mode of Interaction State-Economy approach. Some basic traits of the institutional set-up which framed the Italian economy will be discussed first. Then, the evolution of public finances from 1970 to 1997 will be analyzed in order to understand the relationship between them and institutional change. Public finances are understood having a complementary role to economic order and it will be shown that they display an ambivalent role: they are expression of intentional economic policies as well as they evolve as a result of endogenous mechanisms switched by external events. Finally, public spending and taxation are strictly connected with State’s legitimisation problems. Therefore, they depend strictly from the social contract definition. Such fact is understood as a basic determinant of the public finances crisis in Italy.

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