Private and Public Sector

TABLE OF CONTENTS

TOPIC PAGE

    • INTRODUCTION   1

    • DEFINITIONS AND CHARACTERISTICS

-PRIVATE SECTOR 1-2

-PUBLIC SECTOR 2-3

    • INTERACTION BETWEEN PRIVATE & PUBLIC SECTORS 3-4

    • EFFECT OF PUBLIC SECTOR ON PRIVATE SECTOR 4-5

    • PRIVATE AND PUBLIC MARKETS FAILURE IN THE PROVISION

      OF GOODS & SERVICES 5-7

    • PRIVATIZATION AND NATIONALIZATION           7-10

    • WHY CERTAIN COMPANIES REMAIN EITHER PARTIALLY OR

      FULLY STATE-OWNED         10-13

    • CONCLUSION 13

    • APPENDIX: GRAPHS 14

    • BIBLIOGRAPHY 15

INTRODUCTION

The purpose of this assignment is to assess the private and public sectors in detail and to see the relationship between the two. In the last twenty years there has been a major increase in the role of the private sector in the delivery of what were once considered public sector services. Outside of transition economies, probably the single most significant change has been the international wave of privatization of utilities. Such privatizations typically involve the complete transfer of ownership to the private sector with the role of the state being reduced to policing prices and conduct, given by Grout (2002: 120).

More recently, however, there has been a rapid growth in more complex forms of private involvement. In many cases the public sector or remain the immediate final purchaser of the services but no longer own or operate the assets necessary for the provision of the service. Such arrangements tend to be referred to as public-private partnerships (Grout, 2002: 134).

DEFINTIONS AND CHARACTERISTICS

Before we start analysing in detail the public and the private sector, it is important that we get a clear understanding of what these sectors entail and how different they are from them from each other.

Private sector

Anon (2011) states that in economics, the private sector...