The state realizes its economic functions through the relevant sector of politics. Often, economic policy is equated with government regulation. Therefore, sometimes difficulties arise with a clear definition of what constitute and what are the very methods of state regulation of the economy.
Under the methods of state regulation of the economy, as a rule, they understand the direct impact of the state on the market conditions and the functioning of entities to ensure the necessary conditions for the operation of the market mechanism. State regulation of the economy - this is one of the components of economic policy. It affects 3 interconnected parts of the production process. These include the regulation of resources, production and finance.
Forms and methods of state regulation of the economy, first of all, are determined by those goals that are facing the governing bodies. Also, their choice is influenced by the tools and means that the state controls in the implementation of economic policy.
Various methods and tools of state regulation of the economy are aimed at informing the main market entities about the current state of the country's economic life and its development prospects, at taking measures to develop the public sector of the economy, at substantiating the most significant provisions of the economic policy carried out at this stage of development.
There are direct methods of state regulation of the economy and indirect ones. The first are associated with the use of administrative means of influencing economic relations in the country. They are characterized by the imperious influence of state bodies on the behavior of the relevant entities and the relations regulated by them.
This is expressed in the adoption by management entities of decisions in the form of legal acts legally binding on the addressees and containing direct instructions for the commission of the required actions. Not only measures of persuasion are used, but also coercion. Such methods include licensing of entrepreneurial activity, state registration of its entities 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;
- setting limits and quotas;
- issuance of government orders;
- application of coercive measures and material sanctions;
- control and supervision, and many others.
A particularly important means of state regulation of the business sector and the economy as a whole is the system of taxation and compulsory licensing.
Methods of state regulation of an indirect economy are based on objective economic means of influence. It is carried out indirectly, without open power influence from the governing bodies. This, first of all, is carried out through the creation of conditions capable of influencing the motivation of a certain economic behavior (with the help of incentives, material incentives and others). Such funds include, first of all, fiscal 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. Legal means of regulation include such instruments as a legal entity, contract, property liability, etc.