State regulation of market economy

In economy development the important role is played by the state. It urged to correct those imperfections which are inherent in a market mechanism. The market doesn’t promote preservation of non-reproducible resources and environment protection, doesn’t create stimulus for manufacture of goods and services of collective using (library, museums etc.), doesn’t guarantee the right to work and the income, doesn’t provide purposeful development of basic researches.

Kazakhstan is in the beginning of a way of reforming of economy. It has no sufficient private experience of formation and use of market system. Therefore studying of practice of state regulation of the developed countries will allow to avoid repetition of many errors in economy development.

The state role is shown through its functions:

1. Creation of a legal basis for acceptance of economic decisions. It develops and passes the laws defining the property right, regulating the enterprise activity, directed on creation of the safe goods etc.

2. Redistribution of incomes and riches. It organizes manufacture of goods and services in which the private sector isn’t engaged; defines a defense cost, foreign policy, formulates programs of education, public health services development.

3. Maintenance of social protection and social guarantees. The state guarantees a minimum of salary, an old-age pension, physical inability, the unemployment benefit, any help needy, carries out indexation of incomes in connection with a rise in prices.

4. Economy stabilization. The government, using the budgetary-tax and monetary policy, aspires to overcome the crisis phenomena, slump in production, to lower unemployment, to smooth inflationary processes.

State regulation aims can be divided into general and concrete. The general concerns: achievement of economic and social stability, maintenance of national competitive advantages, economic safety, adaptation of the market mechanism to various situations and etc.

Specific goals depend on objects of state regulation.

Objects are spheres, branches, regions, and also processes, situations, the phenomena where there were problems which demand state intervention. The basic objects are a business cycle, regional and branch structure of an economy, employment, monetary circulation, the balance of payments, the prices, competition condition

, social relations, external economic relations.

The subjects of regulation are the central, regional, municipal administration bodies.

The history of development of the countries testifies that there are two types of state regulation: full state monopolism in management of an economy, characteristic for the USSR, Cuba, Albania, and various variants of a combination of market and state regulators which are realized in Japanese, Swedish, Chinese and other models of development. Efficiency of regulation is predetermined by presence of strong legislative, executive and judicial power.

Regulation methods are subdivided on direct and indirect. Direct are legal, administrative and some economic means.

Legal regulation consists in an establishment of rules of “economic game» for firms of manufacturers and consumers.

Administrative means are based on imperiously-administrative relations and include measures of protection, permissions and compulsions. For example, the authorities stop delivery of licenses for new industrial building, protecting environment.

It is possible to refer to compulsion measures the following: that the authorities oblige the industrial enterprises to establish purifying facilities, to create work places for youth etc.

Indirect methods include the economic means connected with stimulation, and some non- economic, for example: belief means. In a number of cases the government addresses with appeals to the population to show restraint in expenses, to buy more domestic goods, to buy bonds of the state loan etc.

Economic means of state regulation are subdivided into means of fiscal and monetary and credit policy.

The fiscal policy and the state budget

As a fiscal policy it is understood the State expenditure and decisions in the field of taxes. As realization of the State expenditure means use of means of the state budget, and taxes are the basic source of its replenishment the fiscal policy is reduced to a manipulation by the state budget.

The state budget-it the annual plan of the State expenditure and sources of their financial covering. It consis from two parts: incomes and expenses. Incomes are formed of tax and non-tax receipts. Tax revenues are 75 % of incomes. Non-tax receipts – are the income of state ownership, the state trade.

Expenses of the state budget carry out functions of political, social and economic regulation. All expenses can be divided into 5 parts:

1.expenses on social needs: public health services, education, social benefits и.д.

2.expenses on economic needs of capital investment in an infrastructure, grants to the state enterprises, a grant to agriculture, expenses on realization of government programs.

3.expenses on arms and material maintence of foreign policy including loans to the foreign states.

4.admistrativno-administrative expenses: the maintenance of governmental bodies, polices, justices etc.

5.payments on a state debt.

The state purchases are demand of the government on goods and services. The authorities of all levels buy about 20 % of production and services produced in the country. They buy services of military men and civil servants, tanks, school buildings and so on.

Monetary and credit policy

- It is a set of the state actions in the field of monetary circulation.

The monetary circulation develops of cash (coins and banknotes) and non-cash (means in accounts in banks, depositary certificates and the state securities)

The credit is movement of money from the proprietor to the borrower on the terms of a reflexivity, payment and urgency.

The monetary-credit policy is directed both on stimulation of the credit and monetary issue, and on their restraint and restriction.

The discout rate is percent, under which Central Bank gives to banks credits for a covering of a time lack of obligatory reserves. Raising the rate under credits, the Central Bank induces bank to reduce loans. It, finally, leads to reduction of credit operations.

Control questions:

1. What is the role of the state?

2. What are the parts of expenses?

3. What does the monetary circulation develop?

Сабақ 13.

Дата добавления: 2015-08-20