The public sector
The public sector is the part of the economy that is under state control
and ownership
The private sector is the part of the economy that is not state owned and
is run by individuals and companies for a profit
Composition of the public sector ‘It is made up of:’
o The national, provincial and local governments and all the structures
within them including national and provincial parliaments and local
councils.
o As well as the services the government provide: national defense, police,
justice, and defense.
o State owned business and public corporations called SOEs such as SAA,
Eskom and the SA post office.
Outsources: uses workers from outside the business or job
Merit goods: mainly services such as education and vaccinations provided by the state for
benefit of society.
Market economy refers to private sector business
o The public sector overlaps with the private sector providing some g/s such
as healthcare and education. Both public and private sectors provide these
services.
Outsourcing and public-private partnerships:
Sometimes the state outsources some g/s it’s meant to provide i.e. it uses
private g/s for public sector
The term public-private partnership refers to such outsourcing.
Public Private Partnership (PPP) is a contract between the gov. and private
businesses so that the private organizations take responsibility for some
of the financial and operational risks of the project.
Examples of PPPs are the Gautrain and toll roads
State uses PPPs to reduce costs of building and operating some public
services and to achieve better quality and service by using private sector
expertise.
Objectives of public Sectors:
Mission to provide g/s that are under/over supplied by the market
Increase economic growth // increase in the ability of the economy to
produce more g/s measured by real GDP
Increase employment // all people who want to work should be able to find
a job
Maintain stability of exchange rates // gov. mange fiscal and monetary
policy
Maintain price stability //increases in prices are kept under control
The public sector is the part of the economy that is under state control
and ownership
The private sector is the part of the economy that is not state owned and
is run by individuals and companies for a profit
Composition of the public sector ‘It is made up of:’
o The national, provincial and local governments and all the structures
within them including national and provincial parliaments and local
councils.
o As well as the services the government provide: national defense, police,
justice, and defense.
o State owned business and public corporations called SOEs such as SAA,
Eskom and the SA post office.
Outsources: uses workers from outside the business or job
Merit goods: mainly services such as education and vaccinations provided by the state for
benefit of society.
Market economy refers to private sector business
o The public sector overlaps with the private sector providing some g/s such
as healthcare and education. Both public and private sectors provide these
services.
Outsourcing and public-private partnerships:
Sometimes the state outsources some g/s it’s meant to provide i.e. it uses
private g/s for public sector
The term public-private partnership refers to such outsourcing.
Public Private Partnership (PPP) is a contract between the gov. and private
businesses so that the private organizations take responsibility for some
of the financial and operational risks of the project.
Examples of PPPs are the Gautrain and toll roads
State uses PPPs to reduce costs of building and operating some public
services and to achieve better quality and service by using private sector
expertise.
Objectives of public Sectors:
Mission to provide g/s that are under/over supplied by the market
Increase economic growth // increase in the ability of the economy to
produce more g/s measured by real GDP
Increase employment // all people who want to work should be able to find
a job
Maintain stability of exchange rates // gov. mange fiscal and monetary
policy
Maintain price stability //increases in prices are kept under control
