Business-government relationship in economic development

Purpose In the process of fostering economic development, many governments, especially those of a small economy, such as Singapore, Taiwan, and Hong Kong, had taken a leading role in managing their economies, in spite of the free-market rhetoric that some of them have made. The purpose of this paper is to examine the reasons and the effects of government involvement in the economy. Design/methodology/approach In this paper, the causes and effects of cooperation and conflict between government and business in economic development are examined from a theoretical perspective, particularly with references made to East Asian economies. Findings Government interventions lead inevitably to both cooperation and conflict with the private sector. Practical implications The strategies for dealing with problems arisen from such relationship are also examined. Originality/value This paper links the theories and concepts from a variety of sources to offer a coherent picture of business-government relationship that is helpful for examining other studies on this topic from a broad perspective.