Abstract
The size of government has always been the debate between the two ideologies of capitalism and communism, the former looks for the minimal role while the latter exercises controls. Yet, governments exist in all economies, what counts is its effectiveness. The discussion on “fertilizer, pillar, and carpet” suggests the various means of government facilitation among businesses, in economic competitiveness and survival of households. The chapter raises three particular roles of the government: developmental, monitorial, and redistributional. Among these three roles, the most crucial role is the distinction between a demand-led and supply-led approach to redistribution. The former approach focuses on the spending side of the government, while the latter concentrates on the promotion of the supply-side factors. The chapter ends with the argument that the minimum wage which has been popularly adopted could turn out to be the maximum wage if other factors, such as experience, are not taken into account.
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