Public Economics from All Angles

In his distinguished career in academia, the IMF and in government, Vito Tanzi has experienced public economics problems from all angles. In the past two decades he has been particularly focused on the economic role of the state in countries with market economies. He started this work in the 1990s partly in collaboration with Dr Ludger Schuknecht with whom he co-authored several papers, including one in the American Economic Review in 1997, and a book, Public Spending in the 20th Century: A Global Perspective (Cambridge University Press, 2000).

Vito Tanzi published a second volume, Government versus Markets: The Changing Economic Role of the State (Cambridge University Press, 2011), that focused on the changing economic role of the state over the past century.

In more recent years, Vito Tanzi has been working on a third volume with the preliminary title: The Termites of the State (and of the Market). The focus of this more ambitious, and nearly completed, volume is significantly different from the two previous ones. It deals with problems (termites) that seem to have grown over recent years in both the operations of governments and the activities of markets. These termites are creating difficulties for the normative role of the state, visualised in the 1950s by economists such as Richard Musgrave and Paul Samuelson. The activities of governments have become too complex to be easily controlled and those of the operations of the market have become significantly different from those visualised by F. Hayek. One of the consequences is that economic outcomes have become less equitable. This development is endangering the legitimate role of the state and of the market and is leading to populist calls for the return to practices that proved disastrous in the past. Mr Tanzi will use his visit to CES to complete this volume, which he hopes will prove to be an important contribution to the literature on public economics.

Vito Tanzi was professor and chairman of the Department of Economics at American University. He was also on the faculty of the George Washington University and a consultant for the World Bank, the United Nations, the Organization of American States and the Stanford Research Institute. Mr Tanzi received his PhD in Economics from Harvard University and has received honorary degrees from the National University of Córdoba (Argentina) and the University of Liège (Belgium).

After his years in academia, Vito Tanzi spent seven years as Head of the Tax Policy Division and twenty years as Director of the Fiscal Affairs Department at the IMF, advising countries' governments on fiscal reforms. That experience was followed by two years as Undersecretary for Economy and Finance, a ministerial position, in the Italian Government.