How can the government influence allocation of resources?

Governments can take many different actions to influence the allocation of resources. Some of the most common actions include subsidies, tax incentives, or preferential credit treatment.
Subsidies are direct or indirect payments that are given to an individual, business, or industry as a form of financial support. Examples of individual subsidies include college grants, unemployment benefits, and welfare payments. Examples of business or industry subsidies include the direct payments given to farms and agribusinesses to supplement income and control the cost and supply of crops.
Tax incentives are exemptions, reductions, or refunds that are given to individuals and businesses to reduce their tax liabilities. These incentives are often designed to encourage a particular behavior or stimulate economic development. For example, the United States offers tax credits to individuals who make energy efficiency improvements to their home and tax credits to businesses that hire veterans and other target groups.
Preferential credit treatment is a phrase used to describe the special terms that some borrowers receive because they are members of a particular group. These terms may include lower interest rates, extended loan duration, limited default penalties, or relaxed repayment conditions. For example, governments sometimes offer preferential credit treatment to low-income homebuyers, entrepreneurs that want to start small businesses, and new industries that are having trouble competing in international markets.
http://www.nyu.edu/econ/user/debraj/Papers/04sig01.pdf

https://uca.edu/acre/2016/08/19/tax-incentives-and-subsidies-two-staples-of-economic-development/