Government plays an important part in the regional economy.
Why government plays a part in economic development
Social impacts. Development can have long-term optimistic effects on the economic well-being of people and places, especially low-skilled, less-educated individuals.
Spillovers. The marketplace will produce too much if private sector sellers and buyers oversee negative spillovers like pollution. They will produce too little when they oversee positive spillovers.
Existing but under-utilized capacity. If private resources or public infrastructure are left idle, a society can miss out on the chance for existing investments’ economic potential.
Political pressure. Decline or lack of progress in the economy prompts demands from voters for economic development action whether good or bad.