A government is an institution that makes and enforces laws, and provides services such as military defense, fire and police departments, roads, education and social services. Governments raise money by taxes and fees and borrow money from the public by selling securities such as bonds. Government employees earn salaries and benefits. Governments are often divided into several branches and agencies, which are headed by a chief executive, president or prime minister.
There is a role for government in a market economy when the costs of government policies are less than the benefits to society. Governments may provide for national defense, address environmental concerns, define and protect property rights, make markets more competitive, redistribute income, and manage externalities.
The oldest and simplest justification for government is to protect citizens from violence. The horrors of a world with little or no government to perform this function are evident in war zones and essentially ungoverned regions. Governments preserve themselves against domestic and foreign threats by maintaining armed forces, conducting intelligence activities, imprisoning or expelling spies or terrorists, and embargoing the export of materials that could aid an enemy.
At the local and state levels, governments allocate funds for things such as local colleges and universities, maintenance of highways, police and fire protection, and public utilities. At the national level, they spend on things like defense, Medicare and Social Security, and the management of federal parks. Representatives elected by the people lobby to secure funding for these and other priorities.
Some argue that governments should regulate businesses to limit their alleged excesses. In their pursuit of profit, businesses are said to damage the environment, violate employment and immigration laws, and defraud consumers. Governments, on the other hand, maintain that regulating business is an important part of protecting the safety and welfare of citizens.
The modern world is filled with many different kinds of governments, from monarchies to communist states and democratic republics. These differ in their degree of rule by the people, and in their capacity to make and implement laws. Nonetheless, most modern governments share certain characteristics.
These include majority rule with respect for minority opinions, transparency and accountability in decision-making, and a bill of rights to limit the power of government officials while guaranteeing the rights of citizens. Governments also must be stable and efficient. No one wants to live in a country where judges give different sentences for similar crimes, or where the law changes from day to day. Finally, most countries require that the courts be respected and the private property of citizens protected. This helps to make societies more prosperous and secure, making it possible for people to invest in themselves and their communities. Governments are also a key contributor to economic growth in the world. Government spending has grown quickly in recent decades, and has been a driving force behind global economic growth. This trend appears likely to continue. For example, China and India have both recently surpassed the United States in terms of gross domestic product (GDP). In addition, these countries are increasing their investments in infrastructure.