The Fiscal Sociology of Interventionist Democracy
CHAPTER 5 The Public Finance System 141
141 CHAPTER 5 The Public Finance System The financial system is defined as the whole system of public reve- nue and expenditure. In developed countries, taxation occupies a central place that prolongs, at least for Europe, the historic legacy of the devel- opment of the modern State. Since the First World War and the crisis of 1929, the financial system of industrial countries has been modified under the influence of the politics of intervention. After the Second World War, the Keynesian Welfare State expanded rapidly. Despite the crisis of the 1970s and the decline of Keynesianism, financial interven- tion through taxation and public expenditure was maintained while the level of tax revenue remained high. The impact of the crisis of the summer of 2008 reestablished public action through expenditure in order to support the banking sector and the economy: the reduction of tax revenue is thus not on the agenda of the majority of the countries entailed in the globalization of the American crisis. Systemic analysis1 allows one to reflect on the interrelations that structure the different components of public finance and its economic, legal and social environment. From this point of view, it appears that the financial system is from now on divided between the finances of the State, those of local authorities, and those of State associations (federal- 1 Systemic analysis insists on the system as a set of interrelated units. It emphasizes the feedback effects and the essential dimension of complexity. Qualities emerge from the interrelations to...
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