The public sector, also called the state sector, is the part of the economy composed of both

public service A public service or service of general (economic) interest is any service intended to address the needs of aggregate members of a community, whether provided directly by a public sector agency, via public financing available to private busin ...

s and public enterprises. Public sectors include the 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. Militaries are typically authorized and maintained by a sovereign state, with their members identifiable by a d ...

law enforcement Law enforcement is the activity of some members of the government or other social institutions who act in an organized manner to enforce the law by investigating, deterring, rehabilitating, or punishing people who violate the rules and norms gove ...

, public infrastructure,

public transit Public transport (also known as public transit, mass transit, or simply transit) are forms of transport available to the general public. It typically uses a fixed schedule, route and charges a fixed fare. There is no rigid definition of wh ...

public education A state school, public school, or government school is a primary school, primary or secondary school that educates all students without charge. They are funded in whole or in part by taxation and operated by the government of the state. State-f ...

, along with public health care and those working for the government itself, such as 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 public ownership or government ownership, is the ownership of an industry, asset, property, or enterprise by the national government of a country or state, or a public body representing a community, as opposed t ...

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 which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government. Employment The private sector employs most of the workfo ...

voluntary sector In relation to public services, the voluntary sector is the realm of social activity undertaken by non-governmental, not for profit organizations. This sector is also called the third sector (in contrast to the public sector and the private sec ...

. The private sector is composed of the

economic sector One classical breakdown of economic activity distinguishes three sectors: * Primary: involves the retrieval and production of raw materials, such as corn, coal, wood or iron. Miners, farmers and fishermen are all workers in the primary sect ...

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 and business, and including the family and the private sphere.

Organization

The organization of the public sector can take several forms, including: * Direct administration funded through

taxation A tax is a mandatory financial charge or levy imposed on an individual or legal person, legal entity by a governmental organization to support government spending and public expenditures collectively or to Pigouvian tax, regulate and reduce nega ...

; the delivering organization generally has no specific requirement to meet

commercial Commercial may refer to: * (adjective for) commerce, a system of voluntary exchange of products and services ** (adjective for) trade, the trading of something of economic value such as goods, services, information or money * a dose of advertising ...

success criteria, and production decisions are determined by government. *

State-owned enterprise A state-owned enterprise (SOE) is a business entity created or owned by a national or local government, either through an executive order or legislation. SOEs aim to generate profit for the government, prevent private sector monopolies, provide goo ...

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 a business practice in which companies use external providers to carry out business processes that would otherwise be handled internally. Outsourcing sometimes involves transferring employees and assets from one firm to another ...

(of the scale many businesses do, e.g. for IT services) is considered a public sector model. A borderline form is as follows: * Complete

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 1992 ...

.) * 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 or other public way on land. It includes not just major roads, but also other public roads and rights of way. In the United States, it is also used as an equivalent term to controlled-access highway, or ...

bridge A bridge is a structure built to Span (engineering), span a physical obstacle (such as a body of water, valley, road, or railway) without blocking the path underneath. It is constructed for the purpose of providing passage over the obstacle, whi ...

tunnel A tunnel is an underground or undersea passageway. It is dug through surrounding soil, earth or rock, or laid under water, and is usually completely enclosed except for the two portals common at each end, though there may be access and ve ...

water supply Water supply is the provision of water by public utilities, commercial organisations, community endeavors or by individuals, usually via a system of pumps and pipes. Public water supply systems are crucial to properly functioning societies. Th ...

, sewers,

electrical grid An electrical grid (or electricity network) is an interconnected network for electricity delivery from producers to consumers. Electrical grids consist of power stations, electrical substations to step voltage up or down, electric power tran ...

s and

telecommunications network A telecommunications network is a group of Node (networking), nodes interconnected by telecommunications links that are used to exchange messages between the nodes. The links may use a variety of technologies based on the methodologies of circuit ...

s are among the public infrastructure.

Public sector staff

Rates of pay for public sector staff may be negotiated by employers and their staff or staff representatives such as

trade union A trade union (British English) or labor union (American English), often simply referred to as a union, is an organization of workers whose purpose is to maintain or improve the conditions of their employment, such as attaining better wages ...

s. In some cases, for example in the United Kingdom, a pay review body is charged with making independent recommendations on rates of pay for groups of public sector staff.

By country

France

As of 2017, France had 5.6 million

civil servants The civil service is a collective term for a sector of government composed mainly of career civil service personnel hired rather than elected, whose institutional tenure typically survives transitions of political leadership. A civil service offic ...

, amounting to 20% of all jobs in France. They are subdivided into three types: the State civil service (, FPE) includes teachers and soldiers, and employs 44% of the workforce. The local civil service (; FPT) is made up of employees of town halls and regional councils: 25% of the workforce. The hospital civil service (, FPH) consists of doctors and nurses and is 21% of the workforce.

Criticism

Right-libertarian Right-libertarianism,Rothbard, Murray (1 March 1971)"The Left and Right Within Libertarianism". ''WIN: Peace and Freedom Through Nonviolent Action''. 7 (4): 6–10. Retrieved 14 January 2020.Goodway, David (2006). '' Anarchist Seeds Beneath the ...

and

Austrian School The Austrian school is a Heterodox economics, heterodox Schools of economic thought, school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result primarily from the motivat ...

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 Murray Newton Rothbard (; March 2, 1926 – January 7, 1995) was an American economist of the Austrian School,Ronald Hamowy, ed., 2008, The Encyclopedia of Libertarianism', Cato Institute, Sage, , p. 62: "a leading economist of the Austri ...

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, some 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.

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

External links

* {{Authority control Public economics Economic sectors Libertarian theory