This study seeks to determine an effective boundary between government and market in light of modern financial theories.According to the findings of this paper,the relationship between government and market must be conceived of as under the “continuous spectrum of change” resulting from economic development.In practice,an effective frontier between government and market not only transforms continuously with the process of economic development but also demonstrates significant contrasts internationally according to the different national characteristics existing in each country.Determining a frontier between government and market requires that the relationship between the two be embedded into a broader set of institutional environmental constraints that incorporate consideration of the dynamic processes and mechanisms of economic development.The key issue is that government and market act with regard to the principle of comparative advantage as they play their respective roles. This study seeks to determine an effective boundary between government and market in light of modern financial theories. According to the findings of this paper, the relationship between government and market must be conceived of as under the “continuous spectrum of change ” resulting from economic development. In practice, an effective frontier between government and market not only transforms continuously with the process of economic development but also significant difference contrasts in according to the different national characteristics existing in each country. relationship between the two be embedded into a broader set of institutional environmental constraints that includes consideration of the dynamic processes and mechanisms of economic development. The key issue is that government and market act with regard to the principle of comparative advantage as they play theirpens roles .