Actions undertaken by a state to influence or regulate economic activity represent a significant aspect of modern economies. These actions encompass a broad range of policies, including taxation, subsidies, regulations, price controls, and the provision of public goods. For example, imposing tariffs on imported goods is a form of such action, designed to protect domestic industries from foreign competition.
Such engagement plays a vital role in addressing market failures, promoting social welfare, and stabilizing the economy. Historically, periods of economic instability have often led to increased calls for such measures. Benefits can include the correction of externalities, the provision of essential services, and the mitigation of income inequality. It is implemented with the goal of achieving specific economic or social outcomes that would not occur naturally in a free market.