ZIMSEC O Level Business Studies Notes: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.