Government refers to the institution that makes and enforces the laws of a state or community. It provides stability and security, and it ensures the fair operation of the business marketplace, among other things. Local, state, and national governments also make many essential public goods, including free public education and police and fire services. They also regulate access to natural resources such as public lands.
People who live in countries with a democratic form of government rely on the ability and willingness of ordinary citizens to make their needs and opinions known to representatives in government. That’s one of the things that distinguishes a democracy from an oligarchy dominated by a small ruling class.
Over time, people built up a set of rules for creating multi-level governments with three broad branches: legislative, executive, and judicial. Each branch has a different role, but they all work together to govern the country.
The legislative branch consists of Congress and other legislative bodies at the state and local levels. Congress passes laws and authorizes spending. It can also use its appropriation authority to direct specific amounts of funds to particular projects, often called “earmarks.” Congress must approve all legislation before it becomes law.
In addition, the executive branch is responsible for carrying out laws passed by Congress. It also oversees the operation of federal agencies, such as the U.S. Postal Service, NASA, the Central Intelligence Agency, and the Environmental Protection Agency. The judicial branch, finally, interprets and applies laws, and it hears and decides on legal cases.
People also rely on government to help them secure the right to own property, which they call “private ownership.” That means that people can build houses and businesses, sell or rent them, and give them away without being violated by anyone else. Governments like ours protect this principle by establishing and enforcing the law that secures private property rights.
A government like ours also facilitates wealth-producing voluntary exchange by establishing and enforcing a rule of law that allows for the transfer of property ownership through enforceable contracts. Governments can even arbitrate disputes between parties by imposing legally binding arbitration agreements on individuals and companies.
In addition, governments are important because they can make sure that everybody gets the most benefit from what we call “public goods.” For example, if someone is robbed by a criminal, the police will take him to jail and punish his attacker. Governments can also make it easy for everyone to access common goods like roads, parks, schools, and hospitals. They can even regulate access to common natural resources, such as fish and water. Governments can provide free public education and policing, as well as mail delivery and food, housing, and health care for the poor. They can even regulate access to natural resources, such as public lands and wildlife, that are in limited supply. They can also keep taxes low to enable people to afford them. Governments also help to establish a framework for defining property and legal rights, and they can provide stability in the event of a natural disaster or war.