What is Public Sector?

The public sector is the name given to the whole set of State institutions dedicated to implementing and managing policies, laws and programs in a country to guarantee its proper development.

The public sector ranges from the administrative divisions of general powers to the set of institutes, agencies and companies under the control of the State, both at the national, regional and local levels.

In concrete terms, the public sector represents organized society. It is their responsibility, therefore, to guarantee the proper functioning of the economy, education, health, public services, both internal and external national security, etc.

All those institutions that depend on the state budget for their operation and report directly to it are part of the public sector, even if they have autonomy, as is the case with public universities.

Characteristics of the Public Sector

The public sector is characterized by the following:

  • It is under the control and direction of the State, either directly or indirectly, and uses public resources and capital to operate.
  • It covers state agencies and institutions and public and semi-public companies in which the State is the majority shareholder.
  • Like the private sector, it is subject to the country’s laws and the Constitution, which generally describes the administrative, legal and political norms by which it must be good.
  • Contrary to the private sector, its goods and resources are collective property. That is, they belong to all the citizens of the country.
  • In the case of public companies, these may have their origin in processes of nationalization or nationalization of private companies or assets. The opposite procedure, the alienation of public goods, is call privatization.

Public Sector Components

The public sector can be classify into two main types of components:

The Centralized Public Sector

Also known as the fiscal sector, the agencies and institutions of the three fundamental public powers are found: the executive, legislative and judicial powers. These institutions are essential for social peace and the stability of the State:

The Executive Power

In charge of the political behaviour of the State and diplomatic and international representation. It includes the administrative and government institutions, such as the presidency, the chancellery, the governorships, etc.

The Legislative Power

In charge of the elaboration of the laws and the control of the public power in representing the country’s political forces. It usually consists of a parliament, unicameral or bicameral (senators and representatives).

The Judicial Power

In charge of supervising the application of the laws and doing justice, reviewing and interpreting the constitutional legal text. This case is about the courts, the courts, and the Supreme Court of Justice.

The Decentralized Public Sector

There are public or State companies and essential service organizations in which the State is the sole or majority shareholder.

Main Functions of the Public Sector

The main functions of the public sector have to do with the defence of a collective welfare. State, that is, the protection of the fundamental interests of citizens and the historical legacy that every country represents. These functions consist of:

Promote Stability and the Rule of Law

This means that the public sector is in charge of creating a social, political and economic framework in which the population can prosper and live in peace, managing itself with a tight and objective body of laws.

Ensure Justice and Equal Opportunities

Which means that the State must try to sugarcoat the primary deficiencies of the least. Favoured so that anyone, in theory, can obtain the just rewards of its efforts.

Intercede in the Economy if Necessary

This is a point on which there is usually little consensus: should the State intervene in the economy to correct the imperfections and inequities of the market. Or should it trust that the latter will take its course until reaching a balance?

Maintain an Effective Bureaucracy

Every State has its bureaucracy: a way to standardize and regulate the procedures and operations that it makes available to the people. And also, with the latter to provide support and response to their fundamental needs: identity, representation, education, justice, etc.

Ensure the Redistribution of Wealth

Through taxes and subsidies, the public sector seeks to create the conditions for the underprivileged to have a real chance of promotion. Fostering a more equitable society with less concentration of wealth in the hands of a few.


It is a part of the economy that is made up of both public services and public enterprises. Public sectors include public goods and government services such as the military, law enforcement, infrastructure, public transport, public education. Healthcare and people who work for the government itself, such as elected officials.