When governments intervene

INTERVENTIONS by governments are increasingly having an impact on businesses. Developing countries, including some in our region, are usually perceived as facing a higher risk of this. But now governments in the United States and other countries are acting with fewer constraints, and for new reasons.

The pandemic re-emphasised concerns about security and scarcity. Citizens expect governments to respond in times of real and urgent need. Moreover, slogans of narrow “me first” nationalism have been re-energised following Donald Trump’s presidency. National champions and state-owned enterprises can find favour to the detriment of others.

Every intervention may seem different in purpose. Yet they support a broader conclusion: officials around the world today are more ready to intervene in what was previously left to market competition. Why is this the case, and what can companies do?