Government has three roles in the economy that bear on the economic fate of ethnic minorities: 1) government provides a legal framework within which transactors can make their own economic (and other) decisions; 2) government can reduce the options available to the transactors; and 3) government can redistribute the fruits of economic transactions.
Government is inextricably bound up with politics, even in non-democratic nations. Therefore, the role of government is greatly influenced by the incentives and constraints facing those individuals who pursue politics as a career. This simple fact is often overlooked in policy discussions in which the government is treated as if it were an external agency correcting the deficiencies of other institutions—more or less “the public interest” personified. While public spirit and self-sacrifice have characterized some statesmen, to expect these to be the sole or dominant incentives among political decision-makers as a whole is to ignore thousands of years of human history.
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