The State and the Market in the Face of New Challenges: A Theoretical Analysis

The article presents a theoretical analysis of the possibilities of market and state coordination mechanisms. In modern conditions, governments of many countries face the need to increasingly use public sector resources to address a range of emerging challenges, demonstrating new limitations of the market mechanism. This poses a challenge for the scientific community to rethink the economic role of the state, the theory of market failures, and the limits of state intervention in the economy. The aim of this work is to justify the current functions of the state and the need for a more active use of state ownership as a tool for regulating the Russian economy in the face of growing challenges. To this end, the theoretical foundations of expanding state participation in the economy and the limits of its effectiveness, as well as new functions of the state set by key national priorities are considered. Based on a theoretical analysis of existing concepts of state intervention in the economy presented by leading foreign and domestic economists, a systematic and holistic approach to the study of the economic functions of the state, a comparative analysis of different countries practices in solving problems caused by digitalization, the COVID-19 pandemic, and sanctions restrictions, the article provides a modern perspective on market failures and state failures, and justifies the importance of state ownership as a regulating tool. As a result, it is concluded that the emergence of new state functions is a response to digital transformation and increasing sanctions pressure. More active involvement of state-owned companies in the process of sharing innovations and resources will contribute to a full-fledged digital transformation of the economy and the achievement of technological sovereignty.

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