ISSN 1608-7143

OECD Journal on Budgeting

Volume 2008/2
OECD 2008

The Role of the State and Public Finance

in the Next Generation

by
Vito Tanzi*

This article discusses the economic role of the state as it evolved during the
20th century, starting with how current tax systems developed and how fiscal
termites can weaken the foundations of tax systems, examining the spending side
of the government role, and speculating on future developments, particularly in the
Latin American context.

* Professor Vito Tanzi is the former Director of the Fiscal Affairs Department of the International
Monetary Fund. This paper was presented at the 20th Regional Seminar on Fiscal Policy of ECLAC
(United Nations Economic Commission for Latin America and the Caribbean), Santiago de Chile,
28-31 January 2008, www.eclac.cl.