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STATE REFORM IN THE 1990s: LOGIC AND CONTROL MECHANISMS

The great political task of the 1990s is to reform or to rebuild the state. Between the 1930s and 1960s, the state became a significant factor in fostering economic and social development. During that period, and particularly after World War II, we witnessed a time of economic prosperity and an increase in standards ofliving as never before in the history of mankind. Yet, since the 1970s, because of its distorted growth coupled with the globalization process, the state entered into a crisis and became the main cause for the drop in economic growth rates and the increase in unemployment and inflation rates that have taken place throughout the world. A neo-conservative wave and market-oriented economic reforms were respectively the ideological and political responses to the crisis reforms which neo-liberals or neo-conservative politicians and intellectuals hoped would reduce the size of the state to a minimum. But in the 1990s, when the neo-conservative proposal of a minimum state proved not to be feasible, the true nature of the reforms was disclosed: the rebuilding ofthe state was essential for it to undertake not just its classical tasks of assuring property rights and contracts, but also those required to ensure social rights and promote competitiveness in the country. State reform involves four issues which, although interdependent, may be distinguished as follows: (a) an economic-political problem concerning the size of the state or the delimitation of the areas the state is supposed to actuate; (b) a deregulation question where the degree of state regulation is discussed; (c) an economic-administrative aspect regarding the recovery of governance, i.e. the financial and administrative capacity to implement political decisions taken by the government; and (d) a political issue the governability problem i.e. the political capacity of the government to represent and to be an intermediary between different interest groups so as to guarantee legitimacy and political power for the administration's decisions. In defining the size of the state, three issues gain relevance: privatization of