26.1 The evolving role of government

The role of government in modern society is pervasive.1 Not only do governments provide or regulate a vast array of services, they also provide the legislative framework for governance. Government can achieve its objectives in many ways: by producing and delivering a service itself; by making direct payments to individuals and businesses; by setting up a government-owned commercial enterprise; by providing direct grants or low-interest financing loan guarantees; by offering tax incentives to individuals and businesses; or by regulating business and other activities of individuals and organizations.

The total outlay of government is between 30 and 50 per cent of gross domestic product (GDP) in most Western industrialized countries, while in some developing countries the public sector represents an even higher proportion of GDP. Governments also provide a relatively high percentage of total national employment. An exhaustive list of challenges facing the public administration sector in various countries would be very long indeed. Governments have sought assistance from consultants on a wide range of economic, social and administrative issues.