Ideally the state should be hired managers of the wealth of the people that is, the citizens of a country. Kind of like the board of a public corporation, effectively hired by shareholders.
But here comes the agency problem.
Then, the state is, equally importantly, a self-defence agency, which protect citizens from threats external (army) and internal (police). Hence the state controls the tools of violence.
The agency problem intensifies.
A carefully built system of checks and balances can sort of keep it at bay. Less carefully built systems turned into tyrannical regimes many, many times in recent history, all across the world.
But here comes the agency problem.
Then, the state is, equally importantly, a self-defence agency, which protect citizens from threats external (army) and internal (police). Hence the state controls the tools of violence.
The agency problem intensifies.
A carefully built system of checks and balances can sort of keep it at bay. Less carefully built systems turned into tyrannical regimes many, many times in recent history, all across the world.