What is provided by the government in a market economy?

Answer 1

These are the roles of government in a market economy.

1. Foreign Relations - Diplomacy and Defense

2. Incubate special research, business and development, such as small businesses, space research, job training, unemployment insurance and more.

3. Protect and regulate the sustainable use of natural resources.

4. Enforce and regulate fair and responsible business practices. Included in this is monitoring monetary policy, giving consumer protection and regulating banking practices.

5. Determine and enforce civil laws of property and conduct. This includes the freedoms of the press, religion and rights of property.

6. Provide public goods and services for the well-being of the community as a whole, such as infrastructure, vaccination programs, disaster relief, fireworks shows, public parks, basic healthcare, subsidized housing, public education and public utilities.

(These are things that the government provides better than private business for the community at large through pooling money and resources. There are more positive externalities for society when government provides public goods and services.)