The public sector (also called the state sector) is the part of the economy composed of public services and public enterprises. Public services include public goods and governmental services such as the military, police, infrastructure (public roads, bridges, tunnels, water supply, sewers, electrical grids, telecommunications, etc.), public transit, public education, along with 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 provide various private goods and services for sale.
Organizations that are not part of the public sector are either a part of the private sector or voluntary sector. The private sector is composed of the business sector, which is 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.
The organization of the public sector (public ownership) 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.
- 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).
- Levels of Public sector are organized at three levels: Federal or National, Regional (State or Provincial), and Local (Municipal or County).
- Partial 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 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 (Barlow et al., 2010). (See the United Kingdom's Private Finance Initiative.)
- 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.
- 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/