A free market economic system has been taken as a paradigm exposition for organizing and streamlining the relationship between state, private property owners and the community. Taking markets as a panacea to some of the gigantic problems that have bound the communities, such as production and distribution problems of goods and services to the community and consumers, the system got its apogee and acclamation after World War II. Before that, the theoretical base related with free market economic system was laid, in 18th century America.
Adam Smith, often called "the Father of Modern Economics", elucidated his economic thoughts in his seminal book - "An Inquiry Into The Nature And Causes Of The Wealth Of Nations". Here, he said that competition between the market actors is a driving force for harvesting the bounty of free market economic systems.
As such, the system is grounded on the simple rule - the demand and supply of goods and service is Pareto efficient enough to determine the price, quality and quantity of goods. Hence, competition between producers, wholesalers and retailers of goods and service has a huge force for determining the benefit accrued to the consumers. That is why some intellectuals enunciated the fact that 'as constitution is a sin qua non to the democratic state, competition between market actors is a magna carta to a free market economic system'.
The EPRDF-led government, after taking on some soul-searching endevours, has made some policy and strategic decisions related to the type of economic line it wants to follow, after 1991. The main theme of the economic journey that the government took is to have a vibrant and robust market-oriented economic system.
To do this, fiscal and monetary policy of the state has been reshuffled in a way that achieves that same objective. Among fiscal and economic policies and strategies that a government took were devaluing the currency, liberalising the market, lifting custom duties and so on.