Public sector
The part of the economy comprising public services and state-owned enterprises.
The public sector, also called the state sector, is the part of the economy composed of both public services and public enterprises. It includes public goods and governmental services such as the military, law enforcement, public infrastructure, public transit, public education, public health care, and government employees like elected officials. Public enterprises are self-financing commercial businesses under public ownership that provide private goods and services for sale.
- Also known as
- State sector
- Components
- Public services and public enterprises
- Examples
- Military, law enforcement, public infrastructure, public transit, public education, public health care
- Organization levels
- Federal/National, Regional (State/Provincial), Local (Municipal/County)
- Funding
- Taxation and self-financing commercial operations
- Related sectors
- Private sector and voluntary sector
Lore & Background
Infrastructure supporting the public sector includes public roads, bridges, tunnels, water supply, sewers, electrical grids, and telecommunications networks. Rates of pay for public sector staff may be negotiated by employers and staff or staff representatives, and in some cases, such as in the United Kingdom, a pay review body makes independent recommendations on pay rates.
Reader's Guide
The public sector is significant as it provides services that benefit all of society, such as street lighting, which a non-payer cannot be excluded from, and services that benefit society as a whole rather than just the individual user. It is a major employer in many countries; for example, in France as of 2017, there were 5.6 million civil servants, amounting to 20% of all jobs, divided into state, local, and hospital civil services. The public sector has been criticized by right-libertarian and Austrian School economists as inherently inefficient, with Murray Rothbard arguing in 1961 that any reduction of the public sector is a net moral and economic gain. American libertarians and anarcho-capitalists have also argued that taxation, which funds the public sector, is coercive and unjust, though some small-government proponents cite the necessity of a public sector for services like national defense, public works, and pollution controls. The term 'wider public sector' is used in the United Kingdom to refer to public sector organizations outside central government.
Did You Know?
- In the United Kingdom, the Immigration Act 2014 requires staff in public-facing roles within the public sector to be sufficiently fluent in English or Welsh.
- Public sector unions concentrate contributions on members of Congress from both parties who sit on committees dealing with federal budgets and agencies.
- As of 2017, France had approximately 5.5 million civil servants, making up 20% of all jobs in the country.
- The public sector can include complete outsourcing, where a privately owned corporation delivers the entire service on behalf of the government.
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