Book Review of “Termites of the state. Why complexity leads to inequality”, de Vito Tanzi

In this paper we make a review of Vito Tanzi’s work ‘Termites of the state. Why complexity leads to inequality’, published in 2018. The said work presents a broad account of the evolution of the role of the state in democratic countries since the end of the 19th century to the first decades of the 21st century. The book makes an analysis of the theoretical foundation of the functions to be developed by the state in a market-based economic system, and it also offers a detailed review of the changes that have marked their evolution in the referred period. Stress is laid on how the economic, technological, social and political transformations have conditioned the scope of the government actions, and how these have shaped the social and economic reality. The author highlights how the increasing complexity of the economic and social relations, as countries become more developed, creates the conditions for the rise and growth of a set of ‘termites’ that undermines the action of both the market and the public sector. Special attention is paid to the factors which, during the last decades, have led to an increased inequality in income distribution, as well as to the alternatives to correct this problem. The book urges the search of new formulas that, without relinquishing the democratic institutions or the market economy, enable to enhance the effectiveness of government interventions.