The public sector is part of the national economy. Including all levels of government and the companies they control. Private companies were excluded. Non-profit organizations were excluded. All families are excluded. The limits are determined by who controls the reins.
Core and Junho Enterprises
Think of it like concentric circles. The inner ring is core public services. These are state and municipal agencies. It defines the core of the industry. The difference from the civilian world is very clear here. This is an employment issue. It is a question of the right to use public power. You are working for the nation. It is the command of the nation.
Behind this core is a more chaotic layer. There are institutions like state government here. They are not directly accountable to the government command system. Social security fund. Regional development agencies. Although they operate outside of direct political control, they perform public functions.
The outermost ring is state-owned companies. The rule here is ownership. The state owns or owns the majority of the company. This is not just a matter of their behavior. The question is who owns the property. Since the 1980s, large-scale privatization has progressed in developed countries. Carrier. A telecommunications company. Some or all of these businesses were sold. However, public ownership is still dominant in some areas. Local public transport is a classic example. Buses and trains still run in the city. The state still holds the key.
Why definitions are important
Economists use the term “public sector” for analytical purposes. It creates contrast. There is the private sector. There is a third volunteer section. This trinity can map the state’s activities in the wider economy. This way you can compare space and time. How does government spending differ from decade to decade? How does it differ by country? This frame reveals unique designs. It shows methods of operation that do not exist in the commercial market.
Conceptual ambiguity
Scientists struggle with this. Defining the public sector is increasingly difficult. Privatization blurs boundaries. The same applies to the decentralization of public power. Think prison. Although they are usually run by private companies, they use the power of the state. Public-private partnerships add another layer of confusion. Institutional restructuring continues again.
The public sector is difficult to define. Particularly suitable for comparative analysis. If we can’t draw clear boundaries, how can we measure them? According to some critics, the concept has lost its conceptual power. The problem of defining clear boundaries is too great.
References
J.-E. Lane, The Public Sector: Concepts, Models and Methods (2000); B. Guy Peters, Bureaucracy (2001).
