public sector

The public sector is that part of economic and administrative life that deals with the delivery of goods and services by and for the government, whether national, regional or local/municipal. Examples of public sector activity range from delivering social security, administering urban planning and organising national defences. The organisation of the public sector (public ownership) can take several forms, including:

Direct administration funded through taxation; the delivering organisation generally has no specific requirement to meet commercial success criteria, and production decisions are determined by government.
Publicly-owned corporations (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 (of the scale many businesses do, e.g. for IT services), is considered a public sector model.

A borderline form is

Complete Outsourcing 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 Britain's Private Finance Initiative.)

The decision about what are proper matters for the public sector as opposed to the private sector is probably the single most important dividing line between socialist, liberal and conservative political philosphy, with (broadly) socialists preferring greater state involvement, conservatives favouring less and liberals being pragmatic.

Public Sector

See also