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The public sector (also called the state sector) is the part of the economy composed of both
public service A public service is a service Service may refer to: Activities :''(See the Religion section for religious activities)'' * Administrative service, a required part of the workload of university faculty * Civil service The civil service is a col ...

public service
s and
public enterprise A state-owned enterprise (SOE) or government-owned enterprise (GOE) is a business enterprise Business is the activity of making one's living or making money by producing or buying and selling Product (business), products (such as goods an ...
s. Public sectors include public goods and governmental services such as the
military A military, also known collectively as armed forces, is a heavily armed, highly organized force primarily intended for warfare War is an intense armed conflict between State (polity), states, governments, Society, societies, or par ...

military
,
law enforcement File:CBP female officers going aboard a ship.jpg, upU.S. Customs and Border Protection officers boarding a ship 'Law enforcement'' is the activity of some members of government who act in an organized manner to enforce the law by discovering, dete ...
,
infrastructure Infrastructure is the set of fundamental facilities and systems that support the sustainable functionality of households and firms. Serving a country, city, or other area, including the services and facilities necessary for its economy An eco ...

infrastructure
,
public transit Public transport (also known as public transportation, public transit, mass transit, or simply transit) is a system of transport for passengers by group travel systems available for use by the general public unlike private transport, typically ...
,
public education State schools ( British English) or public schools ( North American English) are generally primary or secondary educational institution, schools that educate all children without charge. They are funded in whole or in part by taxation. State fu ...
, along with
health care Healthcare is the maintenance or improvement of health Health is a state of physical, mental and social well-being Well-being, also known as ''wellness'', ''prudential value'' or ''quality of life'', refers to what is intrinsically valuab ...

health care
and those working for the government itself, such as
elected officials An official is someone who holds an office (function or Mandate (politics), mandate, regardless whether it carries an actual Office, working space with it) in an organization or government and participates in the exercise of authority, (either the ...

elected officials
. 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 State ownership, also called government ownership and public ownership, is the ownership of an industry Industry may refer to: Economics * Industry (economics) In macroeconomics, an industry is a branch of an economy that produces a clos ...
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 The private sector is the part of the economy An economy (; ) is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods an ...
or
voluntary sector The voluntary sector, independent sector, or civic sector is the duty of social activity undertaken by organization An organization, or organisation ( Commonwealth English; see spelling differences), is an entity – such as a company, a ...
. The private sector is composed of the
economic sector Image:Economic sectors and income.JPG, 250px, Percentages of a country's economy made up by different sectors. Countries with higher levels of socio-economic development tend to have proportionally less of their economies operating in the primary a ...
s 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 Civil society can be understood as the "third sector" of society, distinct from government A government is the system or group of people governing an organized community, generally a State (polity), state. In the case of its broad ...
.


Organization

The organization of the public sector can take several forms, including: * Direct administration funded through
taxation A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or Legal person, legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, ...
; the delivering organization generally has no specific requirement to meet
commercial Commercial may refer to: * a dose of advertising conveyed through media (such as - for example - radio or television) ** Radio advertisement ** Television advertisement * (adjective for:) commerce, a system of voluntary exchange of products and se ...

commercial
success criteria, and production decisions are determined by government. *
State-owned enterprise A state-owned enterprise (SOE) or government-owned enterprise (GOE) is a where the government or state has significant control through full, majority, or significant minority ownership. Defining characteristics of SOEs are their distinct leg ...
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). * Levels of Public sector are 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 that is or could be done internally, and sometimes involves transferring employees and assets from one firm A company ...

outsourcing
(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 that is or could be done internally, and sometimes involves transferring employees and assets from one firm A company ...

outsourcing
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 Her Majesty's Government, United Kingdom government procurement policy aimed at creating "public–private partnerships" (PPPs) where private firms are contracted to complete and manage public projects. ...
.) *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 road A highway is any public or private road A road is a wide way leading from one place to another, typically one with a specially prepared surface which vehicles and bikes can use. Roads consist of one or two roadways (British English: ...
s,
bridge A bridge is a structure A structure is an arrangement and organization of interrelated elements in a material object or system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to ...

bridge
s,
tunnel A tunnel is an underground passageway, dug through the surrounding soil/earth/rock and enclosed except for entrance and exit, commonly at each end. A pipeline Pipeline may refer to: Electronics, computers and computing * Pipeline (computi ...

tunnel
s,
water supply Water supply is the provision of water Water (chemical formula H2O) is an , transparent, tasteless, odorless, and , which is the main constituent of 's and the s of all known living organisms (in which it acts as a ). It is vital for ...
, sewers,
electrical grid An electrical grid is an interconnected network for 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 Transmission: Backgr ...
s and
telecommunication Telecommunication is the transmission of information by various types of technologies over wire A wire is a single usually cylindrical A cylinder (from Greek Greek may refer to: Greece Anything of, from, or related to Greece Gr ...
networks are among the public infrastructure.


Criticism

Libertarian and Austrian economists have criticized the idea of public sector provision of goods and services as inherently inefficient.Rothbard, M. N. (1961). The fallacy of the ‘public sector.’. The Logic Of Action Two, Application and Criticism from the Austrian School.
Libertarians Libertarianism (from french: libertaire, "libertarian"; from la, libertas, "freedom") is a political philosophy Political philosophy is the philosophical study of government, addressing questions about the nature, scope, and legitimacy of ...
and
anarcho-capitalists Anarcho-capitalism is a political philosophy Political philosophy is the philosophical study of government, addressing questions about the nature, scope, and legitimacy of public agents and institutions and the relationships between them. It ...
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 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 Administratio ...
*
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 The Organisation for Economic Co-operation and Develop ...
*
Nationalization Nationalization (or nationalisation) is the process of transforming privately-owned asset In financial accountancy, financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangi ...
*
Privatization Privatization (or privatisation in British English British English (BrE) is the standard dialect of the English language English is a West Germanic languages, West Germanic language first spoken in History of Anglo-Saxon England, ea ...
*
Private sector The private sector is the part of the economy An economy (; ) is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods an ...
*
Public ownership State ownership, also called government ownership and public ownership, is the ownership of an industry Industry may refer to: Economics * Industry (economics) In macroeconomics, an industry is a branch of an economy that produces a clos ...
*
Public–private partnership A public–private partnership (PPP, 3P, or P3) is an arrangement between two or more Public sector, public and private sectors of a long-term nature.Hodge, G. A and Greve, C. (2007), Public–Private Partnerships: An International Performance Re ...
* Public sector business cases for projects *
Special-purpose district Special districts (also known as special service districts, special district governments, limited purpose entities, or special-purpose districts) are independent, special-purpose governmental units that exist separately from local governments such a ...
*
State-owned enterprise A state-owned enterprise (SOE) or government-owned enterprise (GOE) is a where the government or state has significant control through full, majority, or significant minority ownership. Defining characteristics of SOEs are their distinct leg ...


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 Partnerships http://blog-pfm.imf.org/pfmblog/2008/02/a-primer-on-pub.html#more * What is the Public Sector? Definition & Examples. (2016, June & July). Retrieved June 10, 2017, from http://www.privacysense.net/terms/public-sector/ {{Authority control Public economics Economic sectors Libertarian theory