ABSTRACT
As a common response to societal problems, state intervention merits special attention. We begin this chapter by defining state intervention, and by tracing it over time. We illustrate how the growth of the interventionist state has occurred in parallel with the rise of industrial capitalism, and how the relationship between the market and the state has evolved along the way. We next consider various arguments for state intervention, and their links to beliefs about the engineerability of society. Transnational problems such as environmental pollution and increasing migrant streams are discussed as examples that call for co-ordinated state intervention. We also examine how a well-functioning bureaucracy can be regarded as a public good, which may be undermined by inefficiencies and corruption. Throughout this chapter, we demonstrate that state intervention can provide solutions for societal problems, but sometimes may also generate new problems of its own. By referring to the principal-agent model, and the concept of perverse incentives, we point to some problems that can emerge from too much state intervention.
