What can we expect of a modern state - and for what price?

Bekesi, Laszlo

In the early years of the new millennium market economy conditions have brought new challenges for modern democracies around the world, prompting them to implement reforms. There is a double pressure on states. On the one hand, they have to meet the requirements of the global economy in terms of competitiveness. On the other hand, they have to maintain social stability and cohesion, prevent the negative consequences of the ever-growing income disparities, and find a way to decrease the already dangerous level of inequality of opportunity. The falling active population, the boom in costs due to the emergence of new technologies, and the conflict between globalisation and the interests of nation states - these are the major problems blocking the way towards a solution. Whether a state sets growth or equilibrium, employment or inflation as an objective in its economic policy is no longer a matter of free choice. Efforts to speed up growth are constrained by weakening equilibrium, while actions to increase the level of employment are limited by rising inflation. The re-structuring of the tax and pension systems as well as the reform of social policy cannot be deferred any longer.

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