Government is the system through which leaders exercise power over a group of people, such as a state or a country. A government’s basic functions include leadership, maintaining order, and providing public services. Governments also enforce laws to protect the rights of individuals. Governments are made up of many kinds of organizations: city councils, state legislatures, and Congress.

Regardless of their type, all governments are the product of people. They are formed when a group of people come together to agree on how to organize their community, state, or nation. In this way, the government reflects the values and beliefs of its constituents. The form of government can be debated: some believe that the best way to govern is by a monarchy, while others favor a republic. The concept of government is complex and can be difficult to define, as different forms of government have emerged from many socio-economic movements. These social movements have been carried into governments by parties claiming to represent these movements, with competing political ideologies.

One major reason that government exists is to create rules to avoid conflicts. These rules can range from the simple, such as a right to private property, to the complex, like laws of taxation and inheritance. Conflicts between people are unavoidable, but if they are to be minimized, it is essential that there be some agreement on the ground rules that will govern them.

Another function of government is to protect common goods. These are goods that benefit everyone but are in limited supply. Some examples are fish in the sea and clean drinking water. These goods must be protected so that a few people do not exploit them at the expense of everyone else. This is the job of government, which can be accomplished through regulations or through direct compulsion, such as taxes.

A third function of government is to provide goods and services that people cannot provide for themselves. These can range from the economic, such as national defense and environmental protection, to the personal, such as health care and education. In this role, the government can cushion the effects of forces outside a person’s control: old age, sickness, unemployment, and war.

Governments need to raise money to finance their activities. This is accomplished by imposing taxes on people or by selling bonds to the public. A bond is an IOU that a government body writes to a buyer. The buyer pays money up front in exchange for the IOU, which will be redeemed at some future date (the maturity).

Local, state, and federal governments allocate funds to various priorities on both the local and national level. On the local level, money is allotted for things such as police and fire departments, schools, and road maintenance. On the national level, money goes to things such as defense spending and Social Security benefits.