Government and the Economic Evolutions

In this paper we try to investigate relationship between government and economic evolution. In order to accept that the efficiency and inefficiency of a market depends on capabilities of the governments in reducing the transactional costs, guaranteeing the property rights, and removing the traditional market failures. Regarding the new institutional approach it is assumed that the persons (private or public agents) seek their maximum benefits in accordance with the limitations and obligations exacted by that institutional structure. Concerning this assumption we may find out that the market of these services will go to its best status. Moreover, in case that the limitations and obligations enacted by those institution can regulate the behavior of the public agents in a manner that they could seek their maximum benefits in producing these services. These institutions are the rules arising from social culture (convention), formal regulations (such as constitution), and parties. Therefore, the history of economic evolution has had a tied with the historical evolution of these institutions.