Functions of the State in the Market Economy

In the market conditions of economic management, state regulation of the economic situation is a controlling, legislative, executive nature that is carried out by state authorities and public organizations in order to stabilize, optimize and adapt the existing economic system to the changing market conditions.

The functions of the state in a market economy are mainly aimed at regulating the market situation in such a way that an optimally productive balance in the economic and social environment is maintained . In addition, the functions of the state in a market economy cover such areas as stimulating economic growth, regulating employment, encouraging positive shifts in the economic structures of industries and regions, and supporting exports.

For the countries of the former socialist camp, the functions of the state in a market economy were particularly clearly manifested during the transition from a planned economy to a market economy that was to be based on a new form of property-private.

Subjects of economic policy are spokesmen, carriers and, at the same time, executors of economic interests. The objects of state regulation of the economy are industries, spheres, regions, situations, conditions and phenomena of social and economic life, in which there are certain difficulties and problems that can not be resolved automatically and require intervention.

The functions of the state in a market economy to regulate its state are manifested through the impact on such objects as the economic cycle, employment, the conditions for capital accumulation, the balance of payments, the conditions of competition, the structure of the economy (sector, regional, sectoral), social security, prices, money circulation, retraining Personnel, research work, environment, social relations, foreign economic relations , etc.

The infrastructure of a market economy is a complex of industries and spheres of activity of an industrial and non-productive nature that ensure the full functioning of the market. It includes banks, stock exchanges, insurance companies, intermediary structures, consulting, marketing, audit organizations, transportation, business communication tools , information systems, a training system, etc. All these institutions facilitate their activities in the sphere of trade, increase the efficiency of the activities of individual elements of the economy. In Russia, most of these elements are in the process of improvement, and some are still in the making.

The state influences the market economy to maintain social and economic stability, strengthen the existing system and adapt it to any changes within the country or taking into account the international situation.

During crises, the state seeks to stimulate consumer activity and demand for goods, encourage investment and monitor employment. Private capital in this regard is granted financial incentives. In a situation of prolonged economic growth, the state should, on the contrary, slow down the growth of demand, production and investment, in order to prevent overproduction and overaccumulation of capital, which can lead to a crisis of overproduction in the future.

The state regulates the economy through various means: administrative (not related to material incentives and based on bans and coercion) and economic. The latter include the means of monetary policy and budgetary policy.