The government works with the private sector in various projects in an economy. The government may support the private sector financially or through favorable legislation. Some areas of the economy are left in complete control of the government, and this is done for several reasons. For example, a government may take full control of a particular sector which the private sector cannot afford to venture in to or areas where there would be a danger in leaving a sector to the private sector. Some areas may not be attractive to the private sector to invest, for example regions with high incidences of insecurity or ones with a low resource endowment. The government’s role is to provide services to the members of the public and not to make profit and therefore, they are left to cater for such regions. Visit infomoney.com to learn more.
The government may not have enough funds to finance all its plans. Therefore, there is a need for a partnership with the private sector to achieve more development goals. The main area where the government has signed pacts with the private sector is infrastructure. Every government’s role is to improve the economy and the living standards of the residents. The infrastructure plays a major role in attracting more local and foreign investments.
With more investments, the number of job opportunities increases and helps to eradicate poverty. For example, a country that depends highly on agricultural production improves the transport networks to increase the access the farmers have to the markets. Some countries enter into agreements with other to form associations that foster trade between them. To facilitate the trade, they upgrade their transport networks and remove the bureaucratic barriers. Some states that have adopted the strategy have achieved good results and scholars have encouraged other states to follow the move. There is also a need to use environmentally friendly alternatives.