The Economic Role of the State: Stiglitz, North, and the Architecture of Institutions

This article provides an in-depth analysis of the economic role of the state, drawing on the scholarly work of Joseph Stiglitz and Douglas North. The authors deconstruct two fundamental attributes of statehood: universal membership and monopoly on coercion, highlighting their far-reaching economic consequences. The text provides a detailed discussion of market failure theory, focusing on information asymmetry and the emergence of information rents, and analyzes the phenomenon of state failure stemming from agency problems. A key postulate is the optimization of institutional architecture to achieve adaptive efficiency and strengthen the fiduciary responsibility of officials. The paper also presents a modern approach to public sector reform, incorporating benchmarking, decentralization, and the exit mechanism in the context of global capital mobility. This work is complemented by an analysis of contemporary industrial policy and methods for increasing government transparency in the face of challenges such as creative accounting and inefficient public contracting.