Abstract
In contemporary democracy fiscal policy is not employed for the fiscal control of necessary state activities but for generation of deficits which causes the state to feed on itself, expands enormously in the service of special interests and is contrary to the public’s interest in fiscal stability and discipline. Starting from the origin of and the reason for, the classical liberal state, I undertake an analysis of the historical theoretical background of public choice. The development and application of public choice analysis can work towards restoring fiscal stability, especially after the outbreak of the global financial crisis that generated the enormous increases in the public deficit and debt in the developed democracies.
Highlights
In contemporary democracy fiscal policy is not employed for the fiscal control of necessary state activities but for generation of deficits which causes the state to feed on itself, expands enormously in the service of special interests and is contrary to the public’s interest in fiscal stability and discipline
The development and application of public choice analysis can work towards restoring fiscal stability, especially after the outbreak of the global financial crisis that generated the enormous increases in the public deficit and debt in the developed democracies
In the 20th century, apart from its central political role—which inherited from the 19th century—the state embarked on a course of continual expansion, implementing actively interventionist economic and social policies
Summary
Τhe state is the basic institution of organization in contemporary societies. Historically, in the modern age, from the need for a state and for strong centralized power, which was the dominant political demand of the societies of the 16th and 17th centuries, we have moved on to the societies of the 20th century, where the state has acquired institutional solidity, expanding functionally into almost all spheres of action in economic and social life. “The pluralist control of the state which emerged from the struggle of workers, farmers, and business groups has produced the disintegration of the earlier structure of property rights and replaced it with a struggle in the political arena to redistribute income and wealth at the expense of the efficiency potential of the Second Economic Revolution.” 18Against this trend, which was made fashionable with public opinion by the mainstream press, stands the declaration of the economists under the auspices of the Cato Institute (2009): “Notwithstanding reports that all economists are Keynesians and that we all support a big increase in the burden of government, we the undersigned do not believe that more government spending is a way to improve economic performance. Ciples22 [27] and tools of public choice23 [31], a policy—within a democratic framework—of constitutional control both of the public deficit and of debt, along with decisive reduction in the size of government
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
