The public sector

Question 1

What is the public sector?

Answer 1

The public sector is made up of organizations which are, directly or indirectly, owned or controlled by central or local government. They are funded by the government and in some cases from their own trading “surplus” or profit.

Question 2

What does the public sector consists of?

Answer 2

The public sector consists of:
- State-owned enterprises
( HŽ, HEP, British Waterways ),

• Local authority services
  ( ZET, KOMUNALAC, Cardiff Bus )

-Government agencies
( AGENCY FOR SCIENCE AND HIGHER EDUCATION )

• Government departments, ministries
  (MINISTRY OF SCIENCE, EDUCATION AND SPORTS)

Question 3

The public sector provides…

Answer 3

…public goods and services, merit goods and services

Question 4

Public goods…

Answer 4

…are goods and services provided by the state that can be consumed by everybody in a society. They are both non-rival and non-excludable, which means that consumption by one person doesn´t reduce the amount available to others and that once provided, all individuals will benefit. (street lighting, national defence, law enforcement)

Question 5

Merit goods..

Answer 5

…are goods or services provided free or cheaply for the benefit of the entire society by a government. Government subsidize these goods and services or provide them for free at the point of use because they would be too expensive and therefore under-consumed if left to the market forces.
(education, health, libraries, museums ang galleries, higher education)

Question 6

Subsidy?

Answer 6

Money given by a government or an organization to
reduce the cost of producing food, a product, etc. and
to help to keep prices low

Question 7

Privatization

Answer 7

• Transferring ownership / Selling public assets to private owners (e.g., selling a state owned factory to private investor)
• Public sector organizations can outsource some
  activities to private sector businesses.

E.g., Paying a private business to provide cleaning
services in a hospital

Question 8

Public-private partnerships

Answer 8

Public-private partnerships involve
collaboration between a government agency and a private-sector company these partnerships are mainly used for financing, building and operating large infrastructure projects.