ABSTRACT
The state has five economic roles. The five economic roles of the state are first, ensuring property rights; second, implementing policies for equal opportunities and to address market failures; Third, redistribution; fourth, ensuring stability and economic stimulation; and final, supply of public goods. Social economists emphasise the third economic domain, of the community economy, with its own economic role of providing unpaid services, sharing resources, networking and cooperation, and trust building within and between communities. The institutional economics view of the state emphasises the problem of government capture. The moral hazard is that the banks only have the upside of the risk but not the downside. The negative view of price regulation as distortions in neoclassical economics may be justified in some cases but is not always supported by real-world situations. In Latin America, tax revenue is below the world average as a percentage of gross domestic products (GDP).
