ABSTRACT
In Western economic literature, the need for government involvement in economic activities is often rationalized by reference to some generally recognized imperfections of the market mechanism. Thus, income inequality, the existence of public goods and externalities connected with both production and consumption, and other forms of market failure, are said to make the market inadequate for allocating economic resources and distributing economic benefits. The question about the role of the government has, therefore, shifted from whether the government must involve itself in economic activities at all, to how much should such an involvement be - how much government participation vis-a-vis the private sector.
