The Role of Government: Enforcing Laws and Regulations
The U.S. federal government creates thousands of new laws and regulations every year. Moreover, state and local governments are adding their own provisions to the body of regulations that limit what businesses and consumers can and cannot do. Thus the hand of government affects business activities, from applying for permits and licenses to starting a business and all the way through to advertising the product.
Sometimes government laws and regulations restrict the freedom of the marketplace. As a consumer, you can’t buy some medications without a doctor’s prescription; you can’t buy alcoholic beverages without a certificate proving that you’re old enough; and you can’t buy certain products lacking safety features, such as cars without seatbelts and medication without childproof tops. Some legislation, such as the Clean Air Act and the Nutrition Labeling and Education Act, forced businesses to enact changes that cost millions and perhaps billions of dollars. The burden of regulation falls particularly hard on small companies, which often lack the legal and administrative resources to keep up with new rules. But just as government bodies create new regulations year after year, they sometimes seek to remove or relax existing regulations through the process of deregulation in order to foster competition.
Reference
Sometimes government laws and regulations restrict the freedom of the marketplace. As a consumer, you can’t buy some medications without a doctor’s prescription; you can’t buy alcoholic beverages without a certificate proving that you’re old enough; and you can’t buy certain products lacking safety features, such as cars without seatbelts and medication without childproof tops. Some legislation, such as the Clean Air Act and the Nutrition Labeling and Education Act, forced businesses to enact changes that cost millions and perhaps billions of dollars. The burden of regulation falls particularly hard on small companies, which often lack the legal and administrative resources to keep up with new rules. But just as government bodies create new regulations year after year, they sometimes seek to remove or relax existing regulations through the process of deregulation in order to foster competition.
Reference
- Michael H. Mescon, Courtland L. Bovée, John V. Thill, Business Today, 9th edition, Prentice Hall, 1999
