Government is a system of people who exercise political and sovereign power with the intent to manage a unit or community in such a way as to ensure it is doing well. Governments are dictated by many different factors, with culture and history playing a huge role in what sort of government is set up. Governments can be classified into types such as democracies, republics, monarchies, and dictatorships.
The first function of government is to provide security, which it does by enforcing law and order in its territory and protecting citizens from violence at home and abroad. Without the security functions of government, societies would be chaos and prone to civil war, terrorism, drug trafficking, and other dangerous problems. Governments are also responsible for protecting private property, which they do by ensuring that citizens don’t trespass on each other’s land and property or use their inventions without permission. Government bodies often have the right to seize property that is being used for illicit purposes, and they can penalize polluting businesses through regulations.
Another key government function is to provide goods and services that individuals cannot create for themselves individually, or that are subject to free-rider problems without government intervention. This includes building public infrastructure such as roads and schools, enforcing safety regulations for workers, and providing social programs like food, housing, and medical care for the poor. Government bodies have the right to take the funds needed to pay for these goods and services from its citizens by imposing taxes. They can also borrow money by selling securities to investors, like bonds.
At the local, state, and national levels, governments draft budgets to determine how much they will spend on various goods and services. They often raise money by imposing fees and taxes on income, property, and sales. Governments must balance the books, so when their cash revenues are insufficient to meet their expenses, they must find ways to raise additional funds. One method is to issue IOUs, or bonds, to the public, which are redeemable at a future date for the original amount plus interest. Governments may also sell assets, such as a military base or natural resources, to raise money.
Some government bodies are more concerned with achieving their policy goals than they are with maintaining liberty, so they may limit the extent to which they can tap into people’s phones or censor what newspapers say. This trade-off between liberty and security is one reason why people elect a variety of government entities, including city councils, state legislatures, and Congress.