The Changing Relationship Between Government Essay

The Changing Relationship Between Government - Essay Example There is some form of a market which gives the government too much power in the market and therefore it is the form that is used by different countries that is ultimately the one which determines the kind of relationship between any government and the business. There is some form of the market which gives the government too much power in the market and therefore it exerts a lot of control when dealing with business. This as the characteristic of most emerging markets immediately after the Second World War. But the capitalist economies have proved that closed markets which are controlled by the government are no better than an open market where the theories of demand and supply are used. In the closed market, there is a lot of control on the price of commodities in the market as well as the process of the business. The government sets the prices which are in the effort of preventing the businesses from exploiting the consumers. But this model of the market gives fewer market incentive s for the business and it also encourages monopoly. There is also a lot of political control of the business. Therefore liberalized market has been seen as an appropriate market model that can be used by the government in the market. Many countries have in the recent past adopted a liberalized market and have recorded massive growth in their economies. For example, China has been having a socialist closed economy until 1989 when it opened up the market. Since then there has been massive growth of the economy which has performed well compared to the earlier times. China has been able to rise to one of the strongest world economy by liberalization its market.