Reasons why the government regulates Business activity

Forms of government

• There two major forms of government in Zimbabwe:
  1. The local governments in the form of councils either urban or rural
  2. The main national government
• There are other laws which apply by virtue of treaties, SADC regulations, the African Union and United Nations

Reasons why governments intervene in the affairs of business

• There are several reasons why the State might intervene in business affairs and regulate businesses.
• This State may do this in order to:
• To raise taxes to fund its public spending as well as other government operations
• To prevent the formation of monopolies and check their power.
• To internalize the social costs of businesses.
• To control the rate of inflation.
• To reduce unemployment.
• To ensure that wealth is equitably distributed.
• To prevent strategic technology from falling into the hands of rival states.
• To achieve a favorable balance of payments
• To prevent racial, gender and other forms of discrimination.
• To prevent unfair employment practices
• To achieve gender balance
• To prevent the dumping of toxic chemicals into rivers or populated areas
• To prevent environmental degradation
• To promote the development of under developed areas
• To protect the country’s moral fabric.
• To protect local industries from foreign competition.
• To prevent the exploitation of customers

To access more topics go to the O Level Business Notes page.