Public service

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A public service is a service which is provided by government to people living within its jurisdiction, either directly (through the public sector) or by financing provision of services. The term is associated with a social consensus (usually expressed through democratic elections) that certain services should be available to all, regardless of income. Even where public services are neither publicly provided nor publicly financed, for social and political reasons they are usually subject to regulation going beyond that applying to most economic sectors. Public service is also a course that can be studied at a college and/or university. The public services is an agency provided by the government that work to help and provide the public, examples of public services are fire brigade, police, army, paramedics, they all have a role in protecting the public in a different way.





A public service may sometimes have the characteristics of a public good (being non-rivalrous and non-excludable), but most are services which may (according to prevailing social norms) be under-provided by the market. In most cases public services are services, i.e. they do not involve manufacturing of goods. They may be provided by local or national monopolies, especially in sectors which are natural monopolies.




Nonetheless, such privately provided public services are often strongly regulated, for example (in the US) by Public Utility Commissions.

In developing countries public services tend to be much less well developed. For example, water services might only be available to the wealthy middle class. For political reasons the service is often subsidized, which reduces the finance available for expansion to poorer communities.


Main article: Nationalization

Nationalization really took off following the World Wars of the first half of the twentieth century. Across Europe, because of the extreme demands on industries and the economy, central planning was required to make production maximally efficient. Many public services, especially electricity, gas and public transport are products of this era. Following the Second World War, many countries also began to implement universal health care and expanded education under the funding and guidance of the state.


Main article: Privatization

There are several ways to privatize public services. A free-market corporation may be established and sold to private investors, relinquishing government control altogether. Thus it becomes a private (not public) service. Another option, used in the Nordic countries, is to establish a corporation, but keep ownership or voting power essentially in the hands of the government. For example, the Finnish state owned 49% of Kemira until 2007, the rest being owned by private investors. A 49% share did not make it a "government enterprise", but it meant that all other investors together would have to oppose the state's opinion in order to overturn the state's decisions in the shareholder's meeting. Regulated corporation can also acquire permits on the agreement that they fulfill certain public service duties. When a private corporation runs a natural monopoly, then the corporation is typically heavily regulated, to prevent abuse of monopoly power. Lastly, the government can buy the service on the free market. In many countries, medication is provided in this manner: the government reimburses part of the price of the medication. Also, bus traffic, electricity, healthcare and waste management are privatized in this way. One recent innovation, used in the UK increasingly as well as Australia and Canada is public-private partnerships. This involves giving a long lease to private consortia in return for partly funding infrastructure.

Public services versus Services of General Interest[edit]



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