Share
Explore BrainMass

The Role of Government and Regulation

The role of government in business is one of the most contentious issues in politics, and ideas about the role that government should play make up the majority of difference between political ideologies in the United States. The government has two main functions: one as a provider and one as a regulator. 

Government as a Provider

As a provider, the government provides goods and services such as roads and schools. As a consequence, it also has a role in redistributing income. Because consumers drive the economy, the government plays a role in ensuring that workers are employed. They do this through the social safety net, employing people themselves, and by providing tax incentives and subsidies to businesses to employ workers. The government also helps stabilize the economy through fiscal and monetary policy. 

Government as a Regulator

As a regulator, the government legislature and judicial branch work to protect consumers (the UCC), investors (SOX), workers (labor laws) and the environment. It also supports the legal framework that supports competition. It does this by enforcing agreements (ie. protecting against breach of contract for example), by protecting property rights (especially intellectual property like copyright, patents and trademarks now), and by maintaining competition through antitrust law (regulating price fixing, collusion and monopolies). 

Have you ever heard of the Tea Party? Many people believe that the government's role is too big - that regulation makes business more difficult, and in order to be a provider, the government taxes too much and distorts the market. The argument is that business makes everyone better off when it is more efficient - new, better, and more affordable products are created and more people can be employed. Government makes business inefficient, making people worse off. There are also other regulation-related issues.

Regulation-Related Issues 

(1) Rent seeking: This is when businesses or other interests lobby for laws that are favourable to their industry. Lobbying costs money, and all of these resources spent to get favourable laws past contribute to the cost of regulation - they are simply a waste. When laws are passed in your favour, you make money on what is called 'economic rent.' Economic rent is made when an income received is above what would be needed to keep a factor of production in current use. For example, the company that published your textbook would probably still be in the publishing business if it could only sell each textbook they wrote for $30. However, because of favourable copyright laws, they are able to charge $100/textbook. We call the excess $70 that the company makes economic rent. Economic rent is how most rich people get rich. 

(2) Capture: Over time interests lobby for existing, legitimate regulation to change in their favour. When an interest is succesful, we say that a legitimate regulation has been "captured" by an interest for its own gain. We can then say that a regulation is no longer legitimate.

(3) Moral hazard: When we insure people against losses, people might take greater risk then they normally would. This was a big part of the argument against bailing out the banks during the 2008 financial crisis. If banks know they are too big to fail, and are going to be bailed out, they might take unnecessary risks knowing the the public will absorb the costs. 

(4) Advocacy science: Interests produce information selectively and in a manner that supports their cause. For example, the Tobacco industry supports studies that suggest there are no health effects of smoking. 

Many of these issues have their roots in political or economics disciplines, but it is still important to consider the role of government and the role of regulation from a business point of view. Business philosophy looks at what the role of business is in society. Business ethics uses these ideas to help us make decisions about what is right and wrong in business. The government and regulation are then used to impose contraints on businesses to ensure that their bahviour is ethical. All three of these topics are therefore inherently linked. 

OBAMA CARE Impact

The President's Universal Health Care efforts resulted in what is commonly referred to as "OBAMA Care" which is currently in place...and a very hot issue ......sparking unyielding controversy among the U.S. citizenry. This insurmountable attention and debate is centered around: Individual Rights; True Capitialism/Free Enterprise

Country Analysis Databases

Apparel and textile industry in Bangladesh. Does Bangladesh have an acceptable economic, political, ethical, legal environment for this specific industry? The analysis should be based on a thorough search of databases, journals and other sources. Please provide list of references and in-text citations. Response sho

Business and Inaccurate Financial Statements

In part, many corporate scandals center on misleading or inaccurate financial statements (Enron, WorldComm, Global Crossing, and Tycho are examples from 2002 mentioned in Chapter 1). Also, the financial crisis in 2007-08 period included corporate failures in the financial sector and enormous losses for investors. With that said.

Occupational Health and Safety

Please answer each with 300 words and use 2 scholarly peer-reviewed articles for each question including one reference from this companion website. http://wps.prenhall.com/chet_goetsch_occupation_7/ What role do you think safety and health professionals should play in a product safety program? Describe how a hypothetical

PUBLIC POLICY and corporate interests

How might a public policy be based on the Public Choice Theory? Public choice is generally concerned with the preservation of the civil order necessary to maintain individual preference and marketplace solutions. Public choice theorists concede that the pure pursuit of individual gain through the marketplace potentially lead

Hurricane Katrina & Public Administration

In 600 words and 3 scholarly references, explain the following: 1) How should the community and its leaders have planned well ahead of time to prevent Katrina's devastation? 2) What are 3 essential administrative actions that were necessary? 3) Who are the 3 leaders that should have been responsible for making such decis

Produce an analysis, synthesis, and evaluation of the Arden Food inc.,.

Produce an analysis, synthesis, and evaluation of the Arden Food inc.,. ARDEN FOODS, INC. Bill Jones, purchase analyst in the corporate purchasing office at Arden Foods, was in the Process of reviewing corrugated cartons purchases. He had gathered statistics on purchases From each plant and it was apparent that one supp

Peace Corps

I need help with the following questions for part of a presentation on The Peace Corps. Any information would be greatly appreciated. Thank-you. a. What current issues is their organization facing at the present time? b. How would they evaluate their fundraising program? i. Do they need more funds? ii. What's the most effe

Government Financial Condition Analysis Concerns

What general problems must be addressed in doing ratio analysis for government financial condition analysis? Do traditional solvency ratios adequately address financial condition analysis concerns?

Raytheon Code of Conduct

Hello Hatim not sure if you got my last message or not but i need your help with another assignment. We can use the same toy company as the previous assignments but we have to change it to selling something to the US Government like bullet proof vest, assualt rifles, bullets, computers, or anything the US goverment will buy. The

Analysis: Disability Programs

There is a wealth of different programs, resources, and support groups out there for people with disabilities, as well as for companies managing the diverse needs of their employees. Go to the government website: Disibility.gov Go through the step-by-step process and choose an area of interest to you. Read more about the o

Government Procurement: Market Research

Please provide assistance on the attached document. Provide more information on Market Research when buying a new and used car. Also what market research is required when searching for a molecular research chemist for a research and development project.

Reasons for Growth in Government

Government often grows to meet the demands of the citizenry and so does the costs associated with that growth. Identify an example of growth that was necessary and provide reasons why. Explain why such expansions are needed to meet the needs of society and how they are funded. These processes sometimes bring harsh criticism? Why

Role of Government: Maximizing Government Efficiency

Imagine that a founding father of your choice has been brought to the future and you have been given the opportunity to talk with him about our federalist representative form of government. He is interested in learning about the current state of our federalist representative form of government. - Explain the roles of the vari

Trade Policies and Issues of Developing to Developed Nations

From your knowledge on the trade issues of developing countries and the problems developing countries have relative to international trade, define and discuss at least two significant differences between developing countries and transition countries in terms of trade issues and trade problems relative to international trade. Be

FDI & Economic Development

Review the article (http://www.vsrdjournals.com/MBA/Issue/2012_11_November/Web/6_Reema_Sharma_1041_Research_Communication_VSRDIJBMR_November_2012.pdf) In this article, the author identifies five areas where FDI contributes to the socio-economic development of developing countries, including: 1. Trade and Investment 2.

Transparency of the government

Is government as transparent as private organizations or should they be more transparent and are accounting practices similar?

Accountability

Write a one page, double spaced memo to a non-financial audience explaining how increasing scrutiny and demand for accountability by the public has influenced reporting for not-for-profit and governmental entities.

Government financial statements

Answer the following questions based on Scottsdale, AZ CAFR year ending June 30, 2012. www.scottsdaleaz.gov/finance/cafr A. Look at the Statement of Fiduciary Net Assets. Which fund types are included? Is the Statement prepared in a format in which Assets - Liabilities = Net Assets? Are net assets shown as being held in

Economics 3

The study of government regulation and the competitive environment for business is relevant to all those who study business. All business candidates need to understand how the competitive environment will impact their employers and businesses. Task: A. Summarize the four major pieces of legislation collectively known as t

Conversion of fund statements to government-wide statements

Directions: 100 words on question 2 only. We have talked a lot about the differences between government wide statements and fund statements. Now we are looking at the actual conversion of fund statements to government-wide. 1. What GASB statement requires government wide statements and why? This answer should include a comm

Adjusting Timing of Sales

You are new accountant at the company and your boss orders you to backdate several sales invoices so that the sales are recognized in the previous fiscal year and not the current year. Assuming that the sales are legitimate, what is the harm of "adjusting" the timing of the sales? What would you do if the boss orders you to make

Government Assistance and Influence

1. Patents, Trademarks, Copyrights, Trade Secrets, etc., need to be registered in every country where a company does business (desires to protect its interest in its intellectual property). Research and comment upon situations where the country is not a Signatory to the international Intellectual Property Agreements and countri

Sample questions for a buyer to ask seller about water line pipes

Hello! I am seeking your kind assistance. Because my company is planning to purchase large water line pipes, they are sending me on a trip to a supplier site. As a buyer, could you provide me with some mandatory questions to assess the supplier as well as some additional advice for me to execute my job effectively? For exampl

Government Oversight

Over the years the government has become more involved in the oversight of accounting fraud and abuse. What are some of the actions that the government has enacted? Have they been successful? Why or why not?

Role that the executive branch plays in health policy formulation

Provide a clear idea of the role that the executive branch plays in health policy formulation and implementation. Examine the role of the executive branch in health care policy. What is the current role that the executive plays? How has this role changed over time? Argue which branch of government should have the largest ro