Methods of state regulation of the economy

The state implements its economic functions through the relevant branch of politics. Often economic policy is identified with government regulation. Therefore, sometimes there are difficulties with a clear definition of what constitutes and what are the methods of state regulation of the economy.

Under the methods of state regulation of the economy, as a rule, understand the direct impact of the state on market conditions and the functioning of subjects to ensure the necessary conditions for the operation of the market mechanism. State regulation of the economy is one of the components of economic policy. It affects 3 interrelated parts of the production process. These include the regulation of resources, production and finance.

First of all, the forms and methods of state regulation of the economy are determined by the goals that the governing bodies face. Also, their choice is influenced by the tools and means that the state controls when implementing economic policy.

Various methods and instruments of state regulation of the economy are aimed at informing the main market subjects about the current state of the country's economic life and the prospects for its development, for carrying out measures to develop the public sector of the economy, and on substantiating the most significant provisions of economic policy pursued at this stage of development.

There are direct methods of state regulation of the economy and indirect. The first are connected with the use of administrative means to influence the economic relations in the country. They are characterized by the powerful influence of state bodies on the behavior of the relevant subjects and the relations regulated by them.

This is expressed in the acceptance by the subjects of management of decisions in the form of legal acts that are legally binding for the addressees and contain direct orders for the commission of the required actions. Not only persuasion, but coercion is used. These methods include licensing of entrepreneurial activity, state registration of its subjects and many others.

Direct methods (administrative regulation) are very diverse. They include

- permission to perform certain actions (licensing);

- mandatory instructions for the commission of actions or their prohibition, as well as their registration;

- establishment of restrictions and quotas;

- issuing government orders;

- application of coercive measures and material sanctions;

- control and supervision and many others.

The system of taxation and compulsory licensing is an especially important means of state regulation of the business sector and the economy as a whole.

The methods of state regulation of the indirect economy are based on objective economic means of influence. It is carried out indirectly, without open power influence on the part of the governing bodies. First of all, this is done through the creation of conditions that can influence the motivation of certain economic behavior (through incentives, incentives, and others). These funds include, first of all, budgetary and monetary policy, pricing tools, indirect planning, etc.

Absolutely all methods of state regulation of the economy are characterized by common (common) goals and objectives. They are always clothed in the necessary and appropriate legal, legislative form. The legal means of regulation include such instruments as a legal entity, contract, property liability, etc.