Public sector

Public sector

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The public sector, sometimes referred to as the state sector, is a part of the state
State (polity)
A state is an organized political community, living under a government. States may be sovereign and may enjoy a monopoly on the legal initiation of force and are not dependent on, or subject to any other power or state. Many states are federated states which participate in a federal union...

 that deals with either the production, delivery and allocation of goods and services by and for the government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...

 or its citizens, whether national, regional
Régional
Régional Compagnie Aérienne Européenne, or Régional for short, is a subsidiary airline wholly owned by Air France which connects hubs at Paris, Lyon, Clermont-Ferrand, and Bordeaux to 49 airports in Europe. The airline operates in Air France livery, retaining its name in small titles and logo on...

 or local
Local government
Local government refers collectively to administrative authorities over areas that are smaller than a state.The term is used to contrast with offices at nation-state level, which are referred to as the central government, national government, or federal government...

/municipal.

Examples of public sector activity range from delivering social security
Social security
Social security is primarily a social insurance program providing social protection or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others. Social security may refer to:...

, administering urban planning
Urban planning
Urban planning incorporates areas such as economics, design, ecology, sociology, geography, law, political science, and statistics to guide and ensure the orderly development of settlements and communities....

 and organizing national defense
Defense (military)
Defense has several uses in the sphere of military application.Personal defense implies measures taken by individual soldiers in protecting themselves whether by use of protective materials such as armor, or field construction of trenches or a bunker, or by using weapons that prevent the enemy...

.

The organization of the public sector (public ownership) can take several forms, including:
  • Direct administration funded through taxation; the delivering organization generally has no specific requirement to meet commercial
    Commerce
    While business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...

     success criteria, and production decisions are determined by government.
  • Publicly owned corporations
    Corporatization
    Corporatization refers to the transformation of state assets or agencies into state-owned corporations in order to introduce corporate management techniques to their administration...

     (in some contexts, especially manufacturing, "state-owned enterprises"); which differ from direct administration in that they have greater commercial freedoms and are expected to operate according to commercial criteria, and production decisions are not generally taken by government (although goals may be set for them by government).
  • Partial outsourcing
    Outsourcing
    Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...

     (of the scale many businesses do, e.g. for IT services), is considered a public sector model.


A borderline form is as follows**
  • Complete outsourcing
    Outsourcing
    Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...

     or contracting out, with a privately owned corporation delivering the entire service on behalf of government. This may be considered a mixture of private sector operations with public ownership of assets, although in some forms the private sector's control and/or risk is so great that the service may no longer be considered part of the public sector. (See the United Kingdom
    United Kingdom
    The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

    's Private Finance Initiative
    Private Finance Initiative
    The private finance initiative is a way of creating "public–private partnerships" by funding public infrastructure projects with private capital...

    .)


In spite of their name, public companies are not part of the public sector; they are a particular kind of private sector
Private sector
In economics, the private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the state...

 company that can offer their shares for sale to the general public.
the role of public sectors are as follows
The role and scope of the public sector and state sector are often the biggest distinction regarding the economic positions of socialist, liberal and libertarian
Libertarianism
Libertarianism, in the strictest sense, is the political philosophy that holds individual liberty as the basic moral principle of society. In the broadest sense, it is any political philosophy which approximates this view...

 political philosophy. In general, socialists favor a large state sector consisting of state projects and enterprises, at least in the commanding heights or fundamental sectors of the economy (although some socialists favor a large cooperative sector
Worker cooperative
A worker cooperative is a cooperative owned and democratically managed by its worker-owners. This control may be exercised in a number of ways. A cooperative enterprise may mean a firm where every worker-owner participates in decision making in a democratic fashion, or it may refer to one in which...

 instead). Social democrats tend to favor a medium-sized public sector that is limited to the provision of universal programs and public services. Economic libertarians and minarchists favor a larger private sector and small public sector with the state being relegated to protecting property rights, creating and enforcing laws and settling disputes, a "night watchman state
Night watchman state
A night watchman state, or a minimal state, has been variously defined by sources. In the strictest sense, it is a form of government in political philosophy where the state's only legitimate function is the protection of individuals from aggression, theft, breach of contract, and fraud, and the...

".

See also


  • Civil Service
    Civil service
    The term civil service has two distinct meanings:* A branch of governmental service in which individuals are employed on the basis of professional merit as proven by competitive examinations....

  • Government agency
    Government agency
    A government or state agency is a permanent or semi-permanent organization in the machinery of government that is responsible for the oversight and administration of specific functions, such as an intelligence agency. There is a notable variety of agency types...

  • Nationalization
    Nationalization
    Nationalisation, also spelled nationalization, is the process of taking an industry or assets into government ownership by a national government or state. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being...

  • Political Economy
    Political economy
    Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...

  • Privatization
    Privatization
    Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...

  • Public economics
  • Public ownership
  • Special-purpose district
    Special-purpose district
    Special-purpose districts or special district governments in the United States are independent governmental units that exist separately from, and with substantial administrative and fiscal independence from, general purpose local governments such as county, municipal, and township governments. As...

  • State-Owned Enterprise
  • Public Sector Business Cases for Projects

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