Employment in the UK Public Sector, December 2013

The public sector, also called the state sector, is the part of the economy composed of both public services and public enterprises. Public sectors include the public goods and governmental services such as the military, law enforcement, infrastructure, public transit, public education, along with health care and those working for the government itself, such as elected officials. The public sector might provide services that a non-payer cannot be excluded from (such as street lighting), services which benefit all of society rather than just the individual who uses the service.[1] Public enterprises, or state-owned enterprises, are self-financing commercial enterprises that are under public ownership which provide various private goods and services for sale and usually operate on a commercial basis.

Organizations that are not part of the public sector are either part of the private sector or voluntary sector. The private sector is composed of the economic sectors that are intended to earn a profit for the owners of the enterprise. The voluntary, civic, or social sector concerns a diverse array of non-profit organizations emphasizing civil society. In the United Kingdom, the term "wider public sector" is often used, referring to public sector organizations outside central government.[2]


The organization of the public sector can take several forms, including:

A borderline form is as follows:


Infrastructure includes areas that support both the public's members and the public sector itself. Streets and highways are used both by those who work for the public sector and also by the citizenry. The former, who are public employees, are also part of the citizenry.[citation needed]

Public roads, bridges, tunnels, water supply, sewers, electrical grids and telecommunication networks are among the public infrastructure.


Right-libertarian and Austrian School economists have criticized the idea of public sector provision of goods and services as inherently inefficient.[3] In 1961, Murray Rothbard wrote: "Any reduction of the public sector, any shift of activities from the public to the private sphere, is a net moral and economic gain."[3]

American libertarians and anarcho-capitalists have also argued that the system by which the public sector is funded, namely taxation, is itself coercive and unjust.[4] However, even notable small-government proponents have pushed back on this point of view, citing the ultimate necessity of a public sector for provision of certain services, such as national defense, public works and utilities, and pollution controls.[5]

See also



  1. ^ "public sector". Investorwords, WebFinance, Inc. 2016.
  2. ^ Glover, A., Accelerating the SME economic engine: through transparent, simple and strategic procurement, paragraph 4.26, accessed 7 October 2022
  3. ^ a b Rothbard, Murray (1961). "The Fallacy of the 'Public Sector'". The Logic of Action Two, Application and Criticism from the Austrian School. [ISBN missing].
  4. ^ Murray N. Rothbard (1998). "The Moral Status of Relations to the State", chapter 24 of The Ethics of Liberty. Humanities Press 1982, New York University Press 1998. ISBN 978-0-8147-7506-6.
  5. ^ Ellickson, R. C. (2017). "A Hayekian Case Against Anarcho-Capitalism: Of Street Grids, Lighthouses, and Aid to the Destitute". NYUJL & Liberty, 11, 371.