Role of government in the development of business. Why do we need government roles and where do we need government role. is it necessary.

1. Role of government in the
development of business in
the economy
M. ALI KEMAL

2. Economy
 Pure Markets and No Government
 We work
 We earn
 We consume
 We save/invest
 So, What is our national income
 GDP = C + S and when S = I, we have GDP = C + I
 In open economy we either exports what is surplus and import what we
need thus GDP = C + I + X – M

3. Why Government
 Facilitator
 Coase theorem – Transaction costs
 Where Market fails
 Conflicts – Borders and otherwise
 Nonexcludability and nonrivalrous
Government intervention are based on the idea that the marketplace cannot
provide public goods or handle externalities. Public health and welfare
programs, education, roads, research and development, national and
domestic security, and a clean environment all have been labeled public
goods.

4. Government as protector
 Rules
 Maintaining law and order internal and on Borders
 Internal Threats
 Police
 Courts
 Foreign Threats
 Army
 Diplomacy

5. Government as facilitator/provider
 Collective Action Problems
 Economic Infrastructure
 Social Welfare
 Essential such as Education and Health
 Redistribute income from the haves to the have-nots
 Regulate – Labour Market, Money Market, Goods Market,
Environment

7. UAE Government – Few Examples
 A one-day court
 Digital Economy
 Fourth Industrial Revolution
 Blockchain Strategy 2021
 Ease of Doing Business
 Green Economy for Sustainable Development