How and why did some governments reform their practices because of the Industrial Revolution?

The most influential reason for government reform in their economies was the Late-Nineteenth-Century Recession. This recession took place because the Industrial Revolution brought uneven prosperity to the world, and short burst of booms and busts. This led to the 3 key reasons for why the recession started: increasing start-up costs for new enterprises, increased productivity leading to rapid price declines, and the under-consumption of manufactured goods. In order to battle this recession governments set up laws such as limited liability, which protected investors from personal responsibility, or liability, for a firm's debt. They also set up stock markets which financed the growth if industry by selling shares or part ownership in companies to individual shareholders. An international economy linked through telegraph, railroad, telephone and steamships provided great income which is represented by the London Stock Exchange. The London Stock Exchange, in 1882, traded industry shares worth 54 million euros, a price that dramatically increased by 1900, selling shares to be worth 443 million euros.


People charging the 4th national bank. Late nineteenth century

http://upload.wikimedia.org/wikipedia/commons/thumb/e/e8/Panic_of_1873_bank_run.jpg/462px-Panic_of_1873_bank_run.jpg