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Public Sector vs Private Sector
The public sector relates to any department, organization, agency or authority that is controlled by government or derives its authority from government. The private sector includes all other organizations controlled by private citizens such as businesses and non-profits. There are grey areas between these two such as an organization partially funded by a government or governments.Role of the Public Sector
The public sector produces value that a society deems above the profit motive. These are the things that a society wants to run according to a system of values because they touch on the human condition, morals or the human experience. For example, a society may deem health, education, justice, defense, public space, natural resources, public safety and environmental protection to be public services that are above the profit motive. It is also common for the public sector to provide basic hard and soft infrastructure as the basis for the economic prosperity and quality of life of a nation. The public sector also plays a critical role in providing a financial system and rules of competition to the private sector. Without the public sector, the private sector could not exist as a single firm would eventually dominate all things without regulation of monopolies. Such a firm would resemble a communist system as it would dominate every aspect of life.Notes
In a communist system, everything is controlled by the government such that the private sector essentially doesn't exist. This creates a massive and all-powerful bureaucracy that centrally plans every aspect of life.Overview: Public Sector | ||
Type | ||
Definition (1) | Any department, organization or agency that is controlled by government or derives its authority from government. | |
Definition (2) | The economic value produced by governments and organizations they control. | |
Contrasted With | Private SectorMarketsProfit Motive | |
Related Concepts |