How do you measure government intervention? And how does it impact economic growth, sustainability, development?

Government intervention can be measured from the amount of government spending and level of government investment in structural capital on long run GNP levels in the economy. Government intervention can also be measured by the amount of government ownership in an industry which can be measured by GOE variable.. Some aspects of government intervention is difficult to quantify such as regulation of labor market as there is no obvious unit of measurement. The price control variable is one of the most important measure of government intervention. This variable shows the degree of price controls on various goods and services by the government. Government intervention in agriculture can be measured by the Comparative Analysis of Protection Measurement Concepts. This concept shows the level of protection in agriculture by the government.

Government intervention can leads to increase in economic efficiency and growth in the case of market failure or in the situation when externalities exist. On the other hand, taxes can reduce economic efficiency because of the distorting behavior.

Government intervention can prevent economic fluctuations. Economic fluctuations can?t be controlled by individuals or by private entities. Intervention of government keeps the economy sustained and brings the economy in balanced track.

Government intervention promotes development in the economy as it improves the infrastructure of the country. In the laissez faire economy people will not make any efforts to invest in development of infrastructure of the country which is very important for the development of the country. Government intervention promotes equitable distribution of income and wealth which also leads to development.