A government exercises regulatory power over an economic system, using its political authority and obtaining legislative approval where necessary. Its political ideology (6.2.1) plays a part in determining its policy on regulation. It is more likely to favour light regulation if it is more market-orientated, wanting to grant more independence to businesses, for example. The tension between individualism and collectivism (2.2) surfaces in several aspects of economic power.
The regulations, which are more fully described below (3.3.1), should ensure that the economy works efficiently, fairly, and without causing harm. They constitute a rulebook for economic activities and a framework for negotiations. The processes by which they are introduced are matters for later chapters: legal powers (5.3.2) or political decisions (6.1.3).
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