The paper “ The Government’ s Role in Formulation and Implementation of Economic Policy” is an excellent example of the literature review on macro & microeconomics. Over the past years, the roles of government in economic development has been changing steadily with a paradigm shift towards more focus on defining the general direction of the economy through different policy strategies, on encouraging participation of all stakeholders and citizens to deliver programs and services. Successive governments in many parts of the world have actively pursued various economic reforms with a wide agreement about the major goals of these reforms including high employment, stable prices, and rapid growth.
However, there is less agreement that these goals are mutually compatible or, among those who regard them as incompatible, about the terms at which they can and should be substituted for one another. There is the least agreement about the role that various instruments of policy can and should play in achieving several goals. This paper discusses the economic policy, in particular the issues around fair work Australia, funding higher education and emission trading as well as the carbon tax.
It is limited to microeconomic approaches as opposed to macroeconomic. The rest of the paper is divided into three sections. The first section is the conceptualization of key terms. This is immediately followed by a discussion on the role of government in specified areas highlighting the various reasons as well as policy instruments used. The third section is a review of the policy instrument. The final section is a conclusion drawn from the entire work. Definition of Key Concepts Policy is a multifaceted concept which embodies numerous different meaning and dimensions.
According to Hart & Vromen (2008), a policy concerns not only the conservative but also the liberal ideologies of the actors involved (Tableman, 2005). It is believed that a good policy must start with the identification of pertinent issues in formulating or defining a specific policy objective (Bridgman & Davis, 2004). Most policies are usually formulated with the aim of achieving a desired goal which is regarded as the best and in the interest of all members of nation. Some of these include but not limited to clean environment, good health, job opportunities, an innovative based economy, higher educational achievements, low levels of poverty rates, high and improved literacy composition, among others (ibid). Taken from the preceding definition, an economic policy imply a specific course of actions implemented by concerned parties especially the government and which are aimed at influencing or controlling the economic behavior.
Examples include the government decisions on spending and taxation, income redistribution from rich to poor just to name but a few. Since the paper is focused on microeconomic approach, it is worth defining it. The term, microeconomic has a lot to do with issues of scarcity and choices.
It mainly focuses on individual decision making or groups engagements in particular course of action in an economic sector or area, often described as market, an arrangement where different people involve in voluntary exchange, with a basic assumption or premise that there are perceived gains from their engagement (Tisdell and Hartley2008:6). In the paragraphs that follow, specific areas of government involvement is discussed under:
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