In what form of government is the economy regulated more by the marketplace than the government?

The form of government that is most likely to allow the market to run the economy, rather than having the government do it, is a democracy.  Democracies do not always allow the market to run the economy, but they are much more likely to do so than other forms of government are.

In order to be willing to allow the market to run the economy, a government has to be very willing to tolerate freedom and liberty.  It has to be willing to keep its hands off the economy and allow it to run on its own.  An authoritarian government, like that of China, perhaps, is not usually comfortable allowing anyone to have much freedom.  Such governments want to have as much control over their populations as they possibly can.  Therefore, they will not want to let the economy run on its own.  It is only a democracy that is likely to be willing to allow such freedom.  Democracies are used to people having freedom and liberty and are able to live with the lack of control that goes with having a market economy.

No democracy allows its market complete freedom to run the economy, and some democracies’ governments do try to exert a lot of control over their economies.  However, democracies are much more likely than any other system of government to allow the market to run their economies.