Fishback defines government policies as the set of rules and laws that the government puts and have a direct or indirect impact on the way people conduct business within a country. The government puts laws in place to inhibit or to encourage certain business strategies within the business market. However, it is wise to note that government policies are a double edged sword and may have either negative or positive impact on the economic development in a country. While some regulations may benefit a country, others may work against its development strategy. For instance, in the US, the government launched a deregulation procedure in the early 1990s as a strategy to open up business development.This was after the government realized that strict regulation of the business market culminated to unprofitability in the business sector. Therefore, the government should be analytical while implementing laws to ensure that they create a healthy business environment. In a dynamic business market, it has become the challenge for the government to choose the best approach to regulate business.
To promote economic development within a country, the government should design laws to regulate competition within the market.Laws should ensure that the every investor has a fair chance to start the business and compete with its rivals. This helps to prevent monopolistic competition that may impact negatively on the economy of a country. Monopolistic competition results to unfair competition, which benefits only a few investors.