Government Intervention And Market System
In most of the countries, the government has intervened in the market system. To some extend there is a dire need of government intervention in the market system, although there is a debate over the point among the economists. Many economists believe that the role of government intervention improves the scenario of the market system. The government can easily enforce the rules that can help in smooth functioning of the market system. On the other hand, there are economists who believe that government interventions in a market system are the reason of inefficiency in the system. Anyway, the amount of government intervention needed in a market system is dependent on the state of a particular economy (Brodsky 1963).
BENEFITS OF GOVERNMENT INTERVENTION IN THE MARKET SYSTEM
The government intervention in the market system has the following positive effects in the market (ilri.org2007 [online]):
Improvement in the market structure: one of the most important aspects of government intervention in the market system is the fact that it brings about an improvement in the market facilities, roads and other desired infrastructure in the market.
Improvement in the institutional infrastructures: Goverment intervention plays an important in role in regulating the corruption and violence in the market system.
Price control by government interventions: The government intervention in the market system avoids the excessive hike in prices by the market leaders.
DRAWBACKS OF GOVERNMENT INTERVENTION IN THE MARKET SYSTEM:
Like every coin that has two faces, the government intervention in the market system too has some draw backs in its end and here are a few (wikipedia2007 [online]):
The procedures of the government are generally cumbersome. This leads to inefficiency in the market system. Most of the time, the marketing boards waste a lot of time and money in holding unnecessary meetings and form reports that delay the decisions in a...
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