Whether it is in the U.S. presidential election campaign or as a result of the debt crisis in Europe, people on both sides of the Atlantic are debating the role of the state. Do we need more government or less of it?
The current international monetary system has certainly delivered a lot. But it also has flaws that need to be fixed, especially if the next phase of globalization is to succeed in bringing a strong and broad-based rise in living standards.
There are limits to how much a government can receive as grants from donors or borrow. So raising tax revenues is a necessary element for governments to spend on providing more of these essential services and, in turn, reduce poverty.
With only five years to go until the deadline for the Millennium Development Goals (MDGs), the poverty reduction agenda has been set back. All is not lost, however. Reducing poverty on a massive scale is doable.