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Has the Global Financial Crisis lead to fundamental change in the relationship between government and business - Essay Example

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Even the developed countries like United States and United Kingdom struggled to counter the threats raised by the recession. Only few Asian countries like India, China were able to escape…
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Has the Global Financial Crisis lead to fundamental change in the relationship between government and business
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Has the Global Financial Crisis lead to fundamental change in the relationship between government and business

Download file to see previous pages... Business is one segment in which governments made some policy changes in order to strengthen the business activities in a controlled manner. In some sectors governments imposed more restrictions whereas in some other sectors government liberalized the rules and assisted the business people to come out from the recession. For example, governments put more control on the activities of financial institutions like banks whereas they assisted other business entities like the automobile sectors in order to save that sector from total destruction. In other words, the relationship between the government and different business entities has undergone contrasting changes because of recession. This paper analyses the extent of changes happened in relationships between the governments and the business because of recession.
The relationship between government and business is important both for the government and the business groups. Governments are primarily operating for safeguarding the interests of the people whereas business always works on making profits. Business always tries to exploit the public resources injudiciously to increase their profits. In other words, the interests of public and business are often contradictory and may not go hand in hand. Governments are fixing the boundaries or the norms in order to reach a compromise between the interests of the people and the interests of business. Government need to protect the interests of both. In order to grow economically, business activities should be increased and for that purpose, more liberalized rules are essential. At the same time, these liberalized rules should never affect the public interest negatively. Thus governments are acting as a bridge between the people and business ensuring that either the people or the business taking any undue advantages.
According to the renowned economist John Maynard Keynes, a purely free market system would tend to ...Download file to see next pagesRead More
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