Final answer:
Governments use laws, regulations, enforcement, and incentives to promote ethical business behavior. Examples include the Sarbanes-Oxley Act and the Dodd-Frank Act, with agencies like the EPA enforcing environmental standards.
Step-by-step explanation:
Governments have multiple methods to encourage ethical behavior in businesses. The establishment of laws and regulations such as those enforcing contracts, protecting health and the environment, and the imposition of price caps on natural monopolies is a key strategy. In addition, the enforcement of antitrust laws prevents anticompetitive mergers and monopolistic practices, which promotes a fair marketplace. Moreover, the government utilizes incentives to promote ethics, like offering tax breaks for corporations practicing corporate social responsibility.
Examples of specific government initiatives include the Sarbanes-Oxley Act that enhances corporate governance and financial disclosure and the Dodd-Frank Wall Street Reform and Consumer Protection Act aimed at reducing risks in the financial system. The Environmental Protection Agency (EPA) also enforces regulations that ensure companies adhere to environmental standards. The government acts as a regulator, protector, provider, consumer, and promoter of national goals seeking to balance the free market with public interests to foster economic growth and protect consumers and employees.