ROLE OF GOVERNMENT World is interdependent. Competition is the single important way it can survive with dignity.
Classicists view that the role of the government is best to be kept to minimum allowing the market mechanism produce the much needed efficiency in resource allocation.The Great Depression of 1930s gave birth of the Keynesian ideology of government intervention in the economy with a view to create aggregate demand.
•In the name development, equity and public welfare, in the past, bureaucratization, stifling of entrepreneurship and the prevalence of institutional corruption took place
Classic Economy"Laissez-faire" notion of economic freedom."Invisible hands" correct the economic problems. "Supply creates its own demand"Market is the center of all human organization.In the name development, equity and public welfare, in the past, bureaucratization, stifling of entrepreneurship and the prevalence of institutional corruption took place.
In all the period government played central role or intervened.Public sector industries geared to import substitution.Protection to local industriesEconomic activities were governed by license systemQuantitative restriction were imposed to imports and exports
Foreign investment were discouraged Foreign exchange transactions were totally under government controlPrivate forest and schools were nationalized and taken by government.