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The public sector, also called the state sector, is the part of the economy composed of both public services and public enterprises. Public sectors include the public goods and governmental services such as the military, law enforcement,
infrastructure Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and priv ...
, public transit,
public education State schools (in England, Wales, Australia and New Zealand) or public schools (Scottish English and North American English) are generally primary or secondary schools that educate all students without charge. They are funded in whole or in pa ...
, along with
health care Health care or healthcare is the improvement of health via the prevention, diagnosis, treatment, amelioration or cure of disease, illness, injury, and other physical and mental impairments in people. Health care is delivered by health profe ...
and those working for the government itself, such as
elected officials An official is someone who holds an office (function or mandate, regardless whether it carries an actual working space with it) in an organization or government and participates in the exercise of authority, (either their own or that of their su ...
. The public sector might provide services that a non-payer cannot be excluded from (such as street lighting), services which benefit all of society rather than just the individual who uses the service. Public enterprises, or state-owned enterprises, are self-financing commercial enterprises that are under public ownership which provide various private goods and services for sale and usually operate on a commercial basis. Organizations that are not part of the public sector are either part of the private sector or voluntary sector. The private sector is composed of the economic sectors that are intended to earn a profit for the owners of the enterprise. The voluntary, civic, or social sector concerns a diverse array of non-profit organizations emphasizing civil society. In the United Kingdom, the term "wider public sector" is often used, referring to public sector organisations outside central government.


Organization

The organization of the public sector can take several forms, including: * Direct administration funded through taxation; the delivering organization generally has no specific requirement to meet commercial success criteria, and production decisions are determined by government. *
State-owned enterprise A state-owned enterprise (SOE) is a Government, government entity which is established or nationalised by the ''national government'' or ''provincial government'' by an executive order or an act of legislation in order to earn Profit (econom ...
s; which differ from direct administration in that they have greater management autonomy and operate according to commercial criteria, and production decisions are not generally taken by a government (although goals may be set for them by the government). *The public sector in many countries is organized at three levels: Federal or National, Regional (State or Provincial), and Local (Municipal or County). * Partial
outsourcing Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity which otherwise is or could be carried out internally, i.e. in-house, and sometimes involves transferring employees and ...
(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 is an agreement in which one company hires another company to be responsible for a planned or existing activity which otherwise is or could be carried out internally, i.e. in-house, and sometimes involves transferring employees and ...
or contracting out, with a privately owned corporation delivering the entire service on behalf of the 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 (Barlow et al., 2010). (See the United Kingdom's
Private Finance Initiative The private finance initiative (PFI) was a United Kingdom government procurement policy aimed at creating "public–private partnerships" (PPPs) where private firms are contracted to complete and manage public projects. Initially launched in 199 ...
.) * Public employee unions represent workers. Since contract negotiations for these workers are dependent on the size of government budgets, this is the one segment of the labor movement that can actually contribute directly to the people with ultimate responsibility for its livelihood. While their giving pattern matches that of other unions, public sector unions also concentrate contributions on members of Congress from both parties who sit on committees that deal with federal budgets and agencies.


Infrastructure

''Infrastructure'' includes areas that support both the public's members and the public sector itself. Streets and highways are used both by those who work for the public sector and also by the citizenry. The former, who are public employees, are also part of the citizenry. Public roads, bridges, tunnels, water supply, sewers,
electrical grid An electrical grid is an interconnected network for electricity delivery from producers to consumers. Electrical grids vary in size and can cover whole countries or continents. It consists of:Kaplan, S. M. (2009). Smart Grid. Electrical Power ...
s and telecommunication networks are among the public infrastructure.


Criticism

Right-libertarian and Austrian School economists have criticized the idea of public sector provision of goods and services as inherently inefficient.Rothbard, Murray (1961). "The Fallacy of the 'Public Sector'". ''The Logic of Action Two, Application and Criticism from the Austrian School''. . In 1961, Murray Rothbard wrote: "Any reduction of the public sector, any shift of activities from the public to the private sphere, is a net moral and economic gain." American libertarians and anarcho-capitalists have also argued that the system by which the public sector is funded, namely taxation, is itself coercive and unjust. However, even notable
small-government Libertarian conservatism, also referred to as conservative libertarianism and conservatarianism, is a Political philosophy, political and social philosophy that combines Conservatism in the United States, conservatism and Libertarianism in the ...
proponents have pushed back on this point of view, citing the ultimate necessity of a public sector for provision of certain services, such as national defense, public works and utilities, and pollution controls.Ellickson, R. C. (2017). "A Hayekian Case Against Anarcho-Capitalism: Of Street Grids, Lighthouses, and Aid to the Destitute". ''NYUJL & Liberty'', 11, 371.


See also

*
Civil service The civil service is a collective term for a sector of government composed mainly of career civil servants hired on professional merit rather than appointed or elected, whose institutional tenure typically survives transitions of political leaders ...
*
Government agency A government or state agency, sometimes an appointed commission, 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 administrati ...
*
List of countries by public sector This is a list of countries by public sector, calculated as the number of public sector employees as a percentage of the total workforce. Information is based mainly on data from the OECD and the ILO. If a source has figures for more than one yea ...
*
Nationalization Nationalization (nationalisation in British English) is the process of transforming privately-owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization usually refers to pri ...
* Privatization * Private sector * Public ownership * Public–private partnership * Public sector business cases for projects * Special-purpose district *
State-owned enterprise A state-owned enterprise (SOE) is a Government, government entity which is established or nationalised by the ''national government'' or ''provincial government'' by an executive order or an act of legislation in order to earn Profit (econom ...


References


Citations


Sources

* Barlow, J. Roehrich, J.K. and Wright, S. (2010). "De facto privatisation or a renewed role for the EU? Paying for Europe's healthcare infrastructure in a recession." ''Journal of the Royal Society of Medicine''. 103:51–55. * Lloyd G. Nigro, ''Decision Making in the Public Sector'' (1984), Marcel Dekker Inc. * David G. Carnevale, ''Organizational Development in the Public Sector'' (2002), Westview Pr. * Jan-Erik Lane, ''The Public Sector: Concepts, Models and Approaches'' (1995), Sage Pubns. * A Primer on Public-Private Partnership
PFM blog: A primer on Public-Private Partnerships
* What is the Public Sector? Definition & Examples. (2016, June & July). Retrieved June 10, 2017, fro
What is the Public Sector? Definition & Examples
{{Authority control Public economics Economic sectors Libertarian theory