Using complete sentences, describe the reason why governments get involved in the economy.

The role of the state as promoter of economic development is the subject of much discussion in economic theory. Liberals understand that the role of the state should be limited to regulating and promoting the appropriate economic environment for private enterprise to operate.

The more progressive tendencies defend that the state should regulate the economic environment, but also must act as a player with the intention of covering society in sectors in which the private economy does not invest because it is not profitable. Moreover, these tendencies believe that the state can be an important agent capable of reducing social inequalities by promoting public policies of income transfer between sectors and social classes.

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