APPROVE
Head of Department
Colonel of the Internal Service
E.N. Bardulin
"____"______201_
Topic 1. general characteristics public sector economy
lecture on discipline
"Economics of the state and municipal sector"
( 080504.65 - "State and municipal administration")
SMK-UMK-D 4.4.2-41-2013
Considered at the meeting
Department of UIMK Protocol No. _____
from "____" _________ 201_
St. Petersburg
1. Learning objectives of the lecture on 1 topic
To give students a holistic knowledge of the patterns and stages of the formation of the public sector economy.
To teach how to use the acquired theoretical knowledge in solving practical problems assigned to organizations and services of the EMERCOM of Russia system.
To develop in students the desire for in-depth mastering of the material in the discipline "Economics of the state and municipal sector", to instill the skills of independent work with primary sources and teaching materials.
2. Educational goals
Education of students' creativity in the course of acquiring professional competencies.
Education of professionally significant qualities among students, development of independent creative thinking among students.
3. Calculation of study time
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Time, min |
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INTRODUCTION MAIN PART Study questions: 1. The concept and boundaries of the public sector economy. 1.1 The concept of public sector economics 1.2 Economics of the public sector and economics of the sector government controlled. their boundaries. 1.3 Factors that determine the need for the public sector of the economy. 2 . The main activities and public goods provided by the public sector of the economy. 2.1 Provision of general public services. Defense. Public order and security. 2.2 Activities of the public administration sector to develop the economy and ensure reproduction. 2.3 Activities of the general government sector in social sphere. 2.4 Economic activities of enterprises owned or controlled by the state. FINAL PART |
4. Literature
Main
Savchenko P.V., Pogosov I.A., Zhiltsov E.N. Economics of the Public Sector: Textbook / Ed. Savchenko P.V., Pogosova I.A., Zhiltsova E.N. – M.: INFRA-M, 2009. – 763 p.
Akhinov G.A., Zhiltsov E.N. Economics of the public sector. - M.: INFRA-M, 2008.
Budget and budgetary system of the Russian Federation: Proc. allowance. Moscow: Dashkov i Ko, 2001.
Economics of the municipal sector: textbook. manual for university students studying in the specialty 080504 "State and municipal management" / Ed. A.V. Pikulkin. - M.: UNITI - DANA, 2008. - 464 p.
Roy O.M. The system of state and municipal management: Textbook. allowance. St. Petersburg: Peter, 2004.
Additional
Volgin N.A., Kokin Yu.P. Incomes of the population and wages in modern Russia. Analysis of the situation, justification of the actions of state authorities and management. M.: RAGS, 2008.
State and municipal finance: Textbook / Under the general. ed. I.D. Matskulyak. M.: RAGS, 2006.
Lykova L.N. Russian tax system: general and special. M.: Nauka, 2006.
Glazunova N.I. The system of state and municipal management: a textbook for universities on special. "Mr. and municipality. ex. " / N.I. Glazunova; State. un-t control. – M.: Prospekt, 2006.
Transformation of the role of the state in a mixed economy. M.: Nauka, 2006.
ANNOTATION
The tutorial is an electronic version of the book:
Economics of the state and municipal sector. Textbook / Alekhin E. V. Penza, 2010.
Introduction
Topic 1. Theoretical foundations of public finance.
Topic 2. Economic functions of the state.
Topic 3. State and municipal sector of the economy.
Topic 4. State financial policy of Russia.
Topic 5. Financing and production in the public sector.
Introduction
The modern system of public finance management is the result of a long development of state institutions. Past
century, and especially post-war period, were characterized by a significant expansion of the public sector in countries with a market economy, which in its growth outstripped the dynamics of the private market sector, which was due to the complication of state functions, the use of new methods of macro- and microeconomic regulation aimed at compensating for "failures" of the market mechanism.
Currently, many highly developed countries use new forms of budget planning, budget execution and evaluation of the results of public finance management, have modern systems budget accounting and financial reporting, institutions of external and internal audit, liquidity management and state (municipal) debt, widely use contractual relations and competitive selection of suppliers of public goods and services. Implementation of best practices and modern methods management of public finances is devoted to a huge number of guidelines prepared by national and international organizations. They proceed from the fact that for all the differences between public financial management systems different countries there is a significant similarity between them in the formulation of the fundamental tasks of management and their solution. This makes it possible to formulate general principles, standards and best management practices that can be successfully implemented in developing countries and countries with economies in transition.
This tutorial is dedicated to general issues theories of the public sector and public finance, the evolution, organization and functioning of the public sector, the principles of the budget structure and current trends decentralization of fiscal powers, as well as the main methodological sources that contribute to the dissemination of best practices in public finance management.
The first topic presents short review theoretical ideas about public finance as part of the economy of the public sector, a description of the main theories regarding taxation, the provision of public services, and financial relationships between authorities of different levels is given. It addresses the following questions: What is the specificity of public goods? Why does the state fulfill the task of providing public goods and services? What are the ways in which public goods and services can be provided? Is it obligatory for the state to produce public goods itself, or can they be produced in the private sector? The answers to these questions largely determine the scale of the public sector, the nature and mechanisms of public finance management. Thus, the involvement in the production of public goods and services is not state enterprises contributes to the reduction of the public sector, the development of contractual relations and a significant change in the functions of public authorities, which have to acquire corporate governance skills that are unusual for them.
The second topic begins with the definition of state functions, an analysis of the evolution of the role of the state in a market economy and the characteristics of state functions in a transitional period. Since the most important instrument of state influence on the economy is the state budget, the analysis then shifts to issues related to the formation and functioning of state budgets. Dynamics are analyzed public spending in the post-war period, factors influencing the growth of budget expenditures, the structure of state budgets of the leading countries of the world in comparison with Russia.
This leads to the important issue of defining the boundaries of the public sector and its sub-sectors. various levels authorities. The textbook analyzes the recommendations of international statistical systems on the formation of the public sector based on the inclusion of institutional units that meet certain criteria. These recommendations are widely applied in many countries of the world, which adapt the general principles international statistics to features national economy and rights. An assessment of the scope of the public sector is a prerequisite for the organization of public financial management and the implementation of public functions. On this basis, in particular, the financial capacity of the state to provide public goods and services is determined.
The analysis of government functions, the definition of the scope and boundaries of the public sector, the characteristics of public goods and services and the ways they are provided, which are the subject of research in the first section, are of great importance for understanding the mechanisms of public finance management. The state provides regulatory legal regulation economy, provides public goods, redistributes income between individuals, has a stabilizing effect on the economy and the financial system, and promotes economic growth. The implementation of these functions is carried out primarily on the basis of the formulation of state policy and the management of public finances. The goals of state policy determine the choice of forms and methods of regulation, fiscal instruments and technologies necessary for the implementation of functions. Thus, setting long-term goals, as a rule, requires the use of multi-year budget planning methods, performance-based budgeting, special debt management methods, etc.
At the same time, the management of public finances in almost any country is carried out on the basis of the distribution of fiscal powers and the interaction of various levels of government. In turn, the nature of the budgetary device and interbudgetary relations largely determine the effectiveness of the implementation of state functions. Search optimal ratio between centralized and decentralized management is one of the central tasks in any national system public finance management.
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Topic 1. General characteristics of the public sector economy
Question 1. The concept and boundaries of the public sector economy
1.1. The concept of public sector economics
Under public sectorThe economy of the country is understood as a sector that represents and serves the interests of the entire population. The state is the main institution that organizes and coordinates the relationship of citizens and social groups in the country and provides conditions for their joint activities. Public authorities, using their organizational forms(legislative, executive and judicial), manage the affairs of society. It is assumed that the public sector is called upon to represent the interests of members of society, so it is customary to call it the public sector.
Consideration of issues related to the public sector of the economy is necessary to understand how the authorities can effectively achieve the goals of their socio-economic policy and how to find the most rational balance between the public and private sectors of the economy. An important role is played by the analysis of public expenditures directions of use Money, costs and benefits, optimal taxation, public choice. It is also necessary to explain why the state is engaged in certain types of activities and not in others, why the list of activities in which the state is engaged is not the same in various countries how development trends are shaping up.
The main activities of the public sectoreconomy are the provision of public goods, the redistribution of income and wealth and the provision of social assistance to the population, as well as the production and sale of goods and services on a commercial basis by enterprises owned or controlled by the state. Due to its special role, the state can also influence the economic behavior of business entities through the adoption of legislative and other regulations, taxation, subsidies and other measures to regulate economic activity.
The provision of public goods to the population - goods and services for collective and individual use related to public consumption, is carried out, as a rule, on free of charge. The economic flows associated with the provision of these services by the public sector are not formalized by purchase and sale transactions, do not depend on supply and demand, and are, as they say, non-market in nature. However, there are factors that determine the overall ability of the state to collect taxes and non-tax funds in public financial funds and the resulting opportunities for the provision of public goods related to the overall economic potential and state of the economy of the country.
The mechanism of the market is not able to produce public goods, the need for which is not expressed in individual effective demand, although society as a whole and its individual members need them. Such public goods include national defense, public order and security, fundamental science, etc.
Public goods are considered as collective if their use by some individuals, such as defense services, does not deprive others of the opportunity to also enjoy these benefits. Individual goods are those that, if consumed by one person, cannot be simultaneously consumed by others, such as medicines in a public hospital. Unlike the benefits provided by the private sector of the economy, public goods are available to all members of society without payment. Since these benefits can be obtained by any member of society without payment, private producers are not interested in their production. These benefits are paid for by financial resources states. In a number of areas of activity, people's needs are met on the basis of both public goods andbenefits provided by private entrepreneurs. This applies, in particular, to health care, education, construction and operation of roads, municipal housing. As a rule, at the expense of public goods in these cases, the needs of less affluent citizens who are not able to pay for expensive private medical and medical services are met. educational institutions etc. By providing citizens with housing, health care, education, etc., the state provides the so-called essential goods, i.e. benefits that people should receive regardless of their income level.
Another important area of state activity is the redistribution of income and wealth and the provision of support to certain groups of the population in the form of social assistance and social insurance using such instruments as the Pension Fund, the Social Insurance Fund, the Compulsory health insurance and etc.
Production of goods and services,which is the third major economic activity of the public sector, is carried out in enterprises owned or controlled by it on a commercial basis. Their goods and services are sold at market prices.
All economic activity of the public sector ultimately involves a focus on improving the welfare of citizens. Level achieved in developed countries economic development led to a long-term trend of higher standards standard of living the bulk of the population. Measures of the social orientation of the economy, direct and indirect regulation of social processes appear and are being implemented on the basis of the state policy of income and expenditure, employment, prices, programs for the development of education, health care, and culture. These processes are reflected in the concept of the welfare state. From these positions, the state sector of the economy ensures the redistribution of income between various social groups of the population, ensuring the implementation of the principle of social justice. It is assumed that the redistribution of income allows you to increase the overall welfare.
An important element of this approach is the principle of solidarity (cooperative) behavior, according to which such behavior brings a greater effect than selfish behavior, determined by the interests of each individual. At the same time, since there is a certain contradiction between personal and collective interests, a coercive mechanism is needed, implemented by public authorities.
Options for welfare economics depend on institutional factors, national, historical, cultural and religious traditions. Countries differ in the share of GDP distributed through the state budget and state off-budget funds. At the same time, a rational balance between final consumption, savings and capital accumulation should be observed, bearing in mind the provision of sustainable long-term economic growth. In this regard, a serious problem in the theory of the welfare state is the contradiction between the need to increase the efficiency of production and the fair distribution of income. Optimization of production efficiency involves the maximum possible use of resources for the purpose of capital accumulation. At the same time, the distribution of income in a market economy is carried out in such a way that people who do not own property are obviously in a losing position and do not have sufficient resources to ensure a socially acceptable standard of living. The state solves this problem with the help of a system of mechanisms for the redistribution of corporate income and individuals aimed at reducing the differentiation of incomes of various social groups of the population, regulating the level of wages of employees, levels of employment and unemployment, financial support for pensioners, the disabled, people with low incomes.
A by-product of this redistribution is an increase in final consumption at the expense of reduced opportunities for capital accumulation. As a result, economic growth is limited, economic development and income growth in the country are hindered both as a whole and per capita. With a significant limitation of accumulation for a long time, the country begins to lag behind other countries in terms of the overall level of well-being. This contradiction is in principle unsolvable, and in practice it is always necessary to find a compromise between efficiency and justice, between today and tomorrow.
The system of formation of government bodies in a democratic society is designed to ensure the predominance of representatives of political forces in them, reflecting the interests of the majority of the population.
On the basis of democratic institutions, citizens and their political associations delegate to the authorities their rights to coordinate activities aimed at meeting common needs. The task of government bodies is to solve the problems of society as a whole, to overcome the interests of certain groups and strata of the population that do not coincide with the national ones. Solving the problems of efficiency and equity largely depends on the political processes in the country. In the course of elections of authorities and in making decisions, individual social groups unite and lobby for their interests, and the interests of individual groups may run counter to the interests of society. Voting procedures and collusion can be reasons for making decisions that are unfavorable for the country's economy, but beneficial for certain groups.
Institutional units of the public sector are subjects of the market economy. At the same time, government bodies, primarily at the federal level, determine the strategy and policy in the field of socio-economic development of society. Their role in the economy is dual. On the one hand, they determine and regulate economic development, on the other hand, they function as subjects of a market economy within its norms and rules. Therefore, consideration of the economy of the public sector cannot be carried out in isolation from the strategy and economic policy in the field of macroeconomics, finance and the monetary sphere. Problems of macroeconomics, finance, money circulation, credit are the subjects of independent disciplines and are studied in the relevant training courses. In this textbook, they are considered to the extent that it is necessary for the study of public sector economics.
1.2. Economics of the Public Sector and Economics of the Public Administration Sector. Their boundaries
Modern economy is mixed. Economic activity in it is carried out by the public sector, as well as private non-financial enterprises, financial-credit and other organizations, often combined general concept « private sector". The economy of the public sector itself is also mixed. The components of the public sector are the general government sector and enterprises owned or controlled by the state, but related, according to the generally accepted division of the economy into economic sectors, to non-financial and financial corporations. The basis of the public sector is the public administration sector, in relation to which public finances are also formed. Consider its place in the system of economic sectors of the economy.
At present, when compiling forecasts of socio-economic development, forming finances, principles for constructing statistics and economic analysis, the boundaries of sectors of the economy are determined in accordance with the system of national accounts. Accordingly, the interpretation of the basic concepts and the definition of the boundaries of the public sector and the sector of public administration should be made in relation to the system of national accounts, which is accepted throughout the world. Thus, unified approaches to the study of the economy of the public sector and the economy of other sectors, their property, and the flows of goods, services, and funds between them are provided. In the system of national accounts adopted by the United Nations in 1993, the public administration sector is singled out as one of the sectors of the economy.
According to this system, economic entities of the country (institutional units) that own and dispose of assets and enter into economic relations with other economic entities, in accordance with their functions and methods of financing costs, they are combined into five institutional sectors of the economy. These sectors are: the sector is not financial corporations; financial corporations sector; public administration sector; the household sector; and the sector of non-profit institutions serving households (NPISHs).
Each of these sectors includes corresponding institutional units. Underinstitutional unitis understood as an economic entity (economic unit) that owns and disposes of assets on its own behalf, assumes obligations, enters into economic transactions with other institutional units, compiles a complete set of accounts, including a balance sheet of assets and liabilities. As business entities are accepted as legal entities (enterprises, government bodies, credit organizations, Insurance companies etc.), as well as households, according tohow they are centers of acceptance economic decisions. Business entities have economic resources in constant circulation.
To non-financial corporationsinclude those on economic territory countries institutional units (corporations and quasi-corporations) whose main function is the production of goods and non-financial services for the purpose of selling them on the market and making a profit. Production costs are reimbursed from sales proceeds. This sector includes, in particular, industrial enterprises, Agriculture, construction, transport, communications, trade, etc. Quasi-corporate enterprises are understood as institutional units that are similar to corporations in terms of their functions and method of financing, but do not formally have the status of a corporation (for example, state unitary enterprises).
To the financial corporations sectorinclude institutional units whose main function is financial and credit activities, monetary regulation, banks, insurance companies, non-state pension funds and other financial intermediary institutions.
To non-profit organizations serving households(population), include public non-profit organizations providing non-market services to households. These are public organizations that include political parties, trade unions, religious organizations, various societies, unions and associations, as well as meet the needs in the field of education, health, culture, etc. They are funded by membership dues, donations and property income.
Household sectorbrings together individuals or groups of individuals who live together and have a common budget. Households manage their resources, have assets and liabilities, engage in economic activity. These include households of people who work for hire, households of entrepreneurs, households of the self-employed (freelancers, owners of small unincorporated farms, family shops, cafes), households of people living on transfers (pensioners, students). This is a sector that mainly consumes goods and services and produces them for its own consumption and sale.
. The public administration sector includes institutional units vested with the right to legislative, executive and judicial power in the territory of the country or its parts. The main functions of the general government sector are the provision of political and regulatory activities, the provision of goods and services on a non-market basis for their collective or individual consumption by members of society, and the redistribution of income and wealth through transfers and subsidies. This predetermines its role as the basis of the public sector, its leading element. Accordingly, the economics of the general government sector is the central link in the economics of the public sector. The allocation of the public administration sector as one of the sectors of the economy is due to the fact that the formation of sectors in the system of national accounts is carried out according to the functions of institutional units in economic activity. Institutional units of other sectors are not engaged in activities typical of public administration. Accordingly, enterprises that manufacture and sell products according to market prices, including those owned and controlled by the state, are not included in this sector.
However, since the state not only exercises certain functions in the field of public administration, but also owns or controls the activities of a significant number of enterprises that produce goods and services on a commercial basis, there is a need to consider the total volume of its economic activity, taking into account the ownership of institutional units. In this regard, along with the concept of the public administration sector, the system of national accounts allows the formation of a collective public sector, also called the public sector. The amalgamation of the general government and state-owned or controlled enterprises that produce goods and services on a commercial basis, as well as private sector enterprises, into the public sector is based on the principle of ownership. Since these enterprises are owned by the state or the state owns part of the property in them, allowing it to exercise a decisive influence on their activities, it can use them to carry out its economic policy. However, by the nature of their economic activity, they are classified as non-financial or financial corporations. In this way,it is necessary to distinguish between the economics of the public sector and the economics of the general government sector.
The implementation of the functions of the public administration sector involves the implementation of a social policy aimed at helping the poor, preventing excessive gaps in the income levels of high- and low-income strata of society. The services of this sector include general government services related to administration, defense, public order and security, services related to economic activity, and social services (health, education, culture, etc.). The state performs these functions not for commercial gain or profit, but to provide public goods or, as is often said, non-market services to society.
One of the most important features of the authorities is their function of managing the affairs of the country, both political and socio-economic, based on the interests of the whole society or its main social strata and political forces. They coordinate all aspects of the political and economic life of the citizens of the country, relying on an extensive network of government bodies, which are the apparatus of control and coercion.
This feature predetermines the dual role of the public administration sector in the country's economy. On the one hand, it determines the institutional framework, development strategy and economic policy of the country for all sectors of the economy, and on the other hand, it is one of the economic sectors and functions within the rules established by it.
The main criterion for classifying institutional units as part of the public administration sector is the functions they perform as an institution that manages the affairs of society. The general government sector consists mainly of state institutions (institutional units of the general government sector) that exercise power as their main activity. Being institutional units, they also engage in economic activities: they own assets, conduct transactions with other institutional units, incur liabilities, and have a complete set of accounts, including a balance sheet of assets and liabilities. Another component of the general government sector are state organizations social insurance, managers of the respective funds. Social insurance organizations, due to their specifics, can be identified as a special sub-sector of the general government sector.
Public administration in federal states implies the existence of several levels of government. Accordingly, when analyzing the economy of the public sector of government, it is necessary to consider the economic activity of government bodies at the federal and regional levels of government and the economic activity of government bodies at the municipal level.
The institutional units of the public administration sector also include budgetary non-profit organizations (NPOs), in respect of which the state authorities determine the program of their activities and appoint their leaders. These non-profit organizations are public policy and funded by government institutional units. Such organizations include, in particular, research institutions and organizations that set standards that guide enterprises and the population in the field of education, healthcare, environmental protection, etc.
The assignment of institutional units to the respective sectors of the economy is carried out in the SNA according to the functional principle. This approach is consistent with the understanding of the general government sector as a sector that provides free services and providing social support to the population in cash (and sometimes in kind) form. Accordingly, enterprises and organizations owned by the state (for example, a government agency, a defense enterprise and a bank) belong, as already mentioned, to different economic sectors depending on the functions they perform.
Public Sectorit is a broader concept than the general government sector. It brings together the general government and state-owned or controlled enterprises and organizations that, like the private sector, produce goods and services based on commercial activities and are an integral part of the non-financial and financial corporations sectors.
The state, as a subject of economic activity, acts not only as an economic sector of public administration, but also as a managing or regulating authority in relation to enterprises owned or controlled by it. The definition of the concept of "public sector" is based on the thesis according to which the state acts "on behalf and on behalf" of its citizens and in their interests uses all the property owned or controlled by it. The impact on the economy from the sector is also carried out through enterprises that produce goods and services, owned or controlled by the state.
For companies located in state property, include state and municipal unitary enterprises operating on the basis of the right of economic management or on the basis of the right of operational management (state-owned enterprises). The property of these enterprises (for example, enterprises of the nuclear industry) belongs to state or municipal authorities, which appoint their leaders, play a decisive role in determining their production program, product prices, conclude contracts for the mandatory supply of products for state needs. At the same time, prices may be set that do not fully cover the costs of production. Instead of strict management, state and municipal authorities provide them with financial assistance, provide benefits, loans, etc.
Another form of enterprises owned by the state or municipal property, are joint-stock companies (for example, joint-stock enterprises of the defense industry) in which they own more than half of the share capital or other forms of capital participation.
The criteria for determining who exactly controls the enterprise are more complex. Control includes policy making, management and leadership. Even if the government does not own most of the capital of an enterprise, but at the same time they control its activities to a large extent, such an enterprise is, in essence, a state enterprise. There is no single unambiguous criterion that determines the procedure for classifying enterprises controlled by the state into the public sector. Currently, work is underway to clarify the signs on the basis of which enterprises can be classified as public sector. The belonging of enterprises to this sector in the course of updating the SNA-93 is supposed to be determined on the basis of a set of indicators:
- ownership of the majority of voting shares the indicator is important in the case of the “one share one vote” principle;
control over the governance of the board or other governing body the controlling body may have the power to appoint and dismiss a majority of the members of the governing body, or the power to veto appointments;
control over the appointment and dismissal of key employees if there is little control over the governing body, then the possibility of appointment to key positions in the staff can play a decisive role;
control over key management structures subcommittees of the governing council (committee), which determine the most important directions of the organization's policy (financial, production);
ownership of a "golden share" and options;
direct regulation and control, for example, in setting prices for manufactured products;
control by the main consumer in the event that all the products of the corporation or the predominant part of it are intended for one or more state consumers;
control by the creditor the state, as a condition for lending, can determine the conditions for control over the use of the loan and the activities of the corporation as a whole.
The basis for attributing a corporation to the public sector is the presence of one or more features.
The procedure for assigning non-profit organizations to the public sector is also specified. Their belonging to the public sector will be determined on the basis of the following indicators:
right of appointment government bodies executives of NPOs;
other constitutive instruments, such as defining the tasks and functions of NGOs, approving the budget, veto power in decision-making, etc.;
the existence of contractual agreements between the state and the NPO some contracts for the supply of goods or services may contain clauses allowing the state to determine certain aspects of the policy or work program of the NPO. However, if at the same time an NPO has the opportunity to independently determine a significant part of its policy, then this means belonging not to the state, but to the private sector;
Degree of state funding as well as when considering the previous indicator, it is necessary to take into account the extent to which state funding determines the policy and program of NCOs; even if public funding is the predominant part, but not accompanied by conditions for policy setting, NPOs should be classified as private sector;
degree of government acceptance financial risks on the activities of NPOs taking risks may be subject to control over the policies of NPOs; however, if such a condition is not established, then, as in the previous cases, NPOs should be classified as private sector.
Enterprises producing goods and services on a commercial basis do not perform public administration functions; their functions do not include the provision of free public goods or social payments to the population. They produce products for sale in the market at economically significant prices.
Enterprises owned or controlled by the state reflect the activities of the state as a producer of goods and services and operate in mainly based on commercial business principles. Their expenses are covered by income from entrepreneurial activity. At the same time, public authorities can have a significant impact on their economic policy and practice. Belonging to the public sector determines a number of features that allow the authorities to use these enterprises to solve social and economic problems, to determine the goals of their activities. When forming the production program, the public interest is placed above the interests of the enterprise. Authorities can have a decisive influence on the production program, the price of its implementation, act as a customer and use other methods of influence. At the same time, they can provide financial assistance, provide subsidies, loans on favorable terms, etc. If decisions are taken by public authorities that adversely affect financial position enterprises, losses or lost profits can be compensated by budget funds. The degree of their economic independence is inversely proportional to the degree of state control. The right of ownership and property-based control allows governments to use them for the purpose of conducting state economic policy and regulating the economy. Receiving government support, these enterprises often sell their products and services at lower prices than private firms would. For example, state-owned enterprises, in order to provide social benefits for low-paid segments of the population, may establish more low prices for housing and communal services, to provide free travel certain categories population in public transport. For the availability of cultural services, low prices can be set or discounts can be provided for certain social groups of the population on tickets to museums.
It is believed that state-owned enterprises are less efficient than private ones. Nevertheless, state-owned enterprises operate successfully in many, including highly developed, countries of the world and are used to implement the most important government programs. The main problem is not who owns the enterprise, but in how its management is organized, how the interest and responsibility of management are ensureding. To do this, a combination of commercial and administrative levers can be used.
With regard to state property, opposite trends have been observed for many decades. One of them is to expand and develop state entrepreneurship through the creation of new and nationalization of old enterprises. The other is the denationalization of enterprises and their transfer to the non-state sector. In many cases, private enterprises, such as UK steel mills, have gone public as a result of bankruptcy. The state was forced to intervene to prevent their closure.
The number of such enterprises in certain periods may increase or decrease depending on the prevailing economic situation and the prevalence of nationalization trends or, conversely, denationalization and privatization.
Along with non-profit organizations of the public administration sector, which are part of the public sector, non-market services are provided to members of the societypublic non-profit organizations serving households(NPISH). The main function of non-profit institutions serving households is to provide services and goods to households on a non-market basis. The subject of consideration in relation to these organizations is the characteristics of their types, scope and types of activities carried out by them, financial support, reproductive processes in this sector of the economy, the relationship of its institutional units with non-resident organizations, as well as their role in the formation and development of civil society.
Share of NPISH in production, the gross value added of all sectors of the economy in 2005 amounted to 0.4%. Share of NPISH in gross disposable national income(taking into account contributions and other receipts) amounted to 1.3%, of which 0.9% was directed to the provision of services to the population. Unlike government bodies, these organizations do not provide services to the general population, but to citizens who are members of or associated with each of these organizations. Thus, trade unions provide assistance to their members, religious organizations provide spiritual services to believers of their respective faiths, sports organizations help athletes, and so on. Their sphere of activity is more limited than the sphere of activity of the state administration, covering society as a whole. They do not belong to the general government sector. However, the functions of public non-profit organizations serving households are similar to those of state administration and are also carried out on non-profit basis. Therefore, their economic activity in this respect is similar to the general government sector.
The subject of study of the economy of the public sector is the role and functions of the state as an economic entity of a market economy, the theoretical foundations and motivations of its economic activity, interaction with other economic entities within the country and abroad. The economic activity of the public sector as a whole, at the federal, regional and municipal levels, as well as in the context of industries and types of economic activity, is subject to consideration. The main issues addressed by public sector economics are:
the impact of the public sector on the level and living conditions of the population based on the production and provision of services on a non-market basis, social payments and the use of other instruments;
formation of income, expenses and property of the public sector;
the impact of economic policy and economic activity of the public sector on other participants in economic activity and their economic behavior;
production of goods and services by the public sector on a commercial basis.
Public Sector Economicshow science deals with both macroeconomics and microeconomics. The subject matter of macroeconomics is the economy as a whole and the economy of its main sectors. Accordingly, when considering the economy of the general government sector as the basis of the public sector, aggregate indicators are used: gross domestic product, gross value added, vasector income, sector gross disposable income, savings and accumulation. At the same time, both their formation by types of activity of the public administration sector and the role of the public administration sector in the redistribution of income between sectors of the economy are of interest. The subject of consideration at the macro level are also public finances and their impact on socio-economic development. With the use of funds accumulated in public finances, the authorities carry out measures aimed at stabilizing and developing the economy, redistribute income (and, accordingly, resources) between sectors of the economy and business entities, produce public goods, provide support to low-income segments of the population by redistributing corporate income and high-income households. Government bodies also have a decisive influence on the regulation of money circulation in the country, since they are the owners central bank related to the sector of financial institutions. At the federal level of public administration, the concept, strategy, economic policy and proportions for the development of the public administration sector, as well as the concept, strategy, economic policy and directions for structural changes in the economy as a whole are determined.
At the same time, the general government sector includes smaller institutional units that carry out smaller-scale economic processes. These include ministries, services, agencies, municipal governments, schools, hospitals, cultural organizations, etc., in relation to which the subject of study is their behavior in the process of production, distribution and consumption of public goods, as well as their relationship between themselves and economic entities in other sectors. It is these institutional units that are in direct contact with the institutional units of the corporate sector, the sector of financial institutions for the supply of goods and services to the public sector, as well as the direct provision of public services to households. From the positions of the micro level, the activities of state-owned and state-controlled enterprises are also considered.
This review should be based on economic theory, explaining the cause-and-effect relationships of the economic activity of the public sector, the basis of its interaction with other sectors. Consideration of the practical activities of the public sector and its theoretical analysis allow us to draw conclusions about the strategic goals, economic policy and specific measures and mechanisms that ensure effective sustainable economic development and improve the living standards and conditions of the population.
1.3. Factors that determine the need for the public sector of the economy
State participation in the economy is usually associated with the contradictory nature of the market economy itself, which is unable to solve a number of complex problems of socio-economic development, the so-called "market failures". Tothe shortcomings of the market economy, causing the need for state intervention in the economy, in particular, include:
the inability of private enterprise to ensure the normal process of reproduction, which leads to crises, unemployment, inflation, etc. Crises and unemployment are evidence that the market economy lacks elements of regulation that ensure sustainable economic development. Depressions and declines in production lead to the ruin of enterprises that failed to fit into the changing conditions of economic activity, and an increase in unemployment. State intervention in the economy helps to avoid deep economic crises, mitigate them and ensure more or less uniform economic growth;
inability of private enterprise to provide the production of public goods, which is mainly due to the impossibility or difficulty of excluding certain individuals from the number of consumers of public goods. The resulting need to provide these benefits free of charge means that many goods and services cannot be provided by the market or can be offered in insufficient quantities. In particular, the market is unable to ensure the country's defense, public order and security. In addition, businesses are unable to provide personalized services to the underprivileged in activities such as education, health care, housingbut-communal services, etc. Finally, business is indifferent to the development of fundamental science as a field of activity that does not generate income, and to applied science, if the projects being developed do not promise quick commercial benefits;
disadvantages of competition.In a number of industries and industries, there are one, two or three firms that occupy a very large market share, which leads to a weakening of competition and the possibility of a hidden agreement. In other cases, there are barriers to entry due to high economies of scale leading to natural monopolies. For example, only one water pipe is sufficient to serve the city, the creation of the second one is associated with a significant rise in cost. The disadvantages of competition, leading to monopoly and monopoly pricing, necessitate state restrictions on these trends, and in the field of natural monopolies, price regulation. In many cases, natural monopoly enterprises are owned by the state;
uneven and poor quality of informationabout consumer properties of goods, production technologies, economic conditions and development trends, which may lead to wrong decisions of market participants. The state is forced to take on information related to the protection of consumer rights, to determine the volume and requirements for information provided by banks to borrowers, so that the latter get an idea of the actual value interest rate, ensure the activities of the meteorological service, etc.;
external effects.There are cases when the activities of corporations harm others, the so-called negative externalities. The most significant damage is caused by environmental pollution. Thus, a leather or chemical enterprise, by dumping waste into a river, forces everyone downstream to clean the water. This forces the state to establish norms for the content of harmful substances, to use systems of fines, to reward those who reduce emissions of harmful substances;
incomplete markets. Private markets in some cases cannot provide the individual goods and services that private enterprise markets need. This applies in particular to certain insurance services, such as bank deposit insurance. Thus, in Russia, in connection with the danger of losing deposits, the state assumed the obligation to reimburse depositors for deposits of up to 700 thousand rubles. Insurance programs on deposits also exist in the US and other countries. However, attention should be paid to several circumstances that in themselves make the participation of the public sector in economic life inevitable, regardless of the “failures” of the market.One of them is that the state authorities have a dual character.On the one hand, they are a tool for organizing political and economic activity in the country, allowing members of society to coordinate their actions to achieve common goals. On the other hand, the fulfillment by the public sector of its functions of coordinating the activities of citizens is based on the right of ownership of its institutional units to the property necessary for this (fixed assets, etc.) and the mobilization and expenditure of funds. It is precisely because of these features that the public administration sector in the market economy becomes one of the sectors of the economy that implements economic and financial operations with other sectors in all areas of economic life. The subjects of the public administration sector carry out economic and financial transactions both among themselves and with institutional units of other sectors of the economy.
Another circumstance predetermining the participation of the government sector in economic life isthe need for the formation and constant adjustment of the institutional foundations of a market economy.A good example is the role of the state in shaping the foundations of a market economy in Russia in the 1990s. last century. State authorities develop legislative and regulatory rules that provide conditions for the functioning of the market mechanism and the use of the potential of a market economy. The right of ownership, the possibility of competitive entrepreneurship, the restriction of monopoly activity, and the guarantee of the execution of contracts are legally ensured.goods, etc. By creating institutional foundations, the state predetermines the norms of economic behavior of subjects of a market economy and the characteristics of the national economies of various countries, in which the norms of a liberal or socially oriented market economy may prevail. At the same time, the peculiarities of historical development and the mentality of the population are taken into account. If an oligarchic regime or a regime expressing the interests of any social group has developed in the country, norms are established that are beneficial for this group of oligarchs or social group (clan). Thus, the public sector economy exists not only because there are market flaws that need to be compensated, but primarily because the public administration sector itself is a subject of economic relations interacting with other sectors of the economy.
The third circumstance isneed for income redistribution. This is one of the most important areas state activities. Business is indifferent to social inequality associated with excessive differentiation of the population in terms of income. Even if there are sufficiently competitive markets, there is no redistribution of resources in which the position of some is not improved at the expense of others and resources are distributed correctly; income distribution can be highly unequal. The income of a significant part of the people is lower living wage. As a result, social tension in society is growing and the development of human capital is sharply hampered, which is fraught with a lag in economic development from other countries. Related to these circumstances is the need to redistribute income in favor of families with children, pensioners, the disabled, and so on.
Finally, many economists believe thatin some cases people act in contradiction to their own interests.Thus, many people are not inclined to save for old age or in case of disability, and special measures are needed to encourage or make such savings in various forms mandatory. Others do not comply with traffic regulations and some form of punishment is required in order to reduce the number of victims of road traffic accidents. Some do not consider vaccinations against common infectious diseases mandatory. All this leads to the need for paternalistic measures on the part of the state, despite the fact that a number of sociologists and economists believe that people's preferences should be respected. In their opinion, interest groups can use the state to implement their ideas about what people should consume and how they should act.
The public sector of the economy creates opportunities for solving problems that private enterprise cannot cope with on the basis of self-regulation. With insufficient state participation in economic life, the disadvantages of a purely market mechanism are manifested in a sharp form. State intervention allows for positive adjustments. However, it can, in turn, lead to negative results.
Therefore, one of the subjects of study of the public administration sector is the analysis of the reasons for the failure of the state in solving socio-economic problems and the motives that encourage public authorities to make certain decisions. Critics of state intervention in the economy rightly point to such serious limitations, as insufficient awareness of the authorities in decision-making, underestimation of the response of the private sector to the measures taken, bureaucracy and corruption of the state apparatus, restrictions caused by political processes.
Lack of information in decision-making and underestimation of the response of the private sector to measures taken by the state.Authorities, when making decisions, cannot always correctly assess their consequences. So, in Russia during the privatization in the 1990s. the danger of the formation of monopolies was not taken into account, while the liberalization of foreign trade did not take into account the danger of competition of foreign firms for national producers. It was assumed that structural changes would take place, contributing to an increase in the technological level of production, however, due to lack of competitiveness, many national enterprises were liquidated, internal Russian market was largely occupied by foreign firms. An attempt to raise the level of payment for housing and communal services in a relatively short time did not take into account the real solvency of a significant part of the population, and this process had to be extended and carried out taking into account the growth of real incomes. Monetization of benefits met with resistancepart of the population and led to higher prices for many types of medicines.
Bureaucracy and corruption of the state apparatus.One of the most important problems is the bureaucratic nature of the state apparatus, which reduces the effectiveness of its activities. Legislative bodies at the center and locally pass laws, and specific detailed rules for their application are often developed by various ministries and departments, and the technical details determined by them are not always adequate to the goals adopted laws. Undesirable decisions may be the result of the ambiguity of adopted laws, insufficient qualifications of the state apparatus, and sometimes its purposeful actions.
Extremely painful for the economy are the corruption of the state apparatus, its merging with the business environment. As a result, the decisions made are often aimed at providing various benefits to individual entrepreneurs at the expense of the public interest.
Restrictions due to political processes,are related to the fact that in democratic states, as a result of elections, representatives of various social strata of the population come to power and pursue policies in accordance with the preferences of their voters. In many cases, they must choose between different preferences or find compromise solutions. As a result of a change of power based on elections, socio-economic policy may change. The consequence is inconsistency in decision-making, which affects the development of the economy. The development of lobbyism and the commercialization of the process of elections to legislative bodies of power, which create conditions for decision-making based on the interests of influential corporate circles, and not the interests of society as a whole or the majority of the population, have a negative impact on the state apparatus.
The shortcomings of state activity are largely related to the weak control of society over state authorities, the negative impact of certain elements of the political process, and insufficient motivation for the effectiveness of state administrative structures. The measures and mechanisms used must be efficient and contribute to the improvement of the economic situation in the country.
There is no unity among economists in assessing the role of the state and public organizations in the regulation of the economy. Many economists believe that various forces with conflicting interests operate in the economy, each of which pulls in its own direction. The state, in their opinion, is such an instrument that is designed to coordinate various trends, develop and promote the implementation of a nationwide vector of development. This idea is connected, in particular, with the concept of dirigisme. At the same time, many economists, mainly from the Anglo-Saxon countries, focus not on state, but on public control and regulation. They point to the imperfection of the state and propose to develop public control, public regulation and voluntary collective use of the principles of cooperation with the widespread use of moral and ethical standards. From these positions, in order to achieve the necessary balance of various interests and achieve national goals in the level and conditions of people's lives, joint efforts of private enterprise, the state and public control are necessary.
If we talk about the role of the state in economic life, we should not focus on the problem of its increase or reduction. The main problem is whether the state copes with its functions and tasks facing society and the economy. Government authorities are always integral part society and perform their functions in the conditions of a specific socio-economic, political and international situation. At the same time, historical traditions and the mentality of the population play a significant role. The problem lies in how these functions are performed, how far the state manages to promote socio-economic development.
The development of civil society institutions is aimed at overcoming negative trends, contributing to an increase in the social responsibility of government bodies, the development of self-government and an increase in the autonomy of its grassroots bodies. The growth of elements of civil society, the formation of public structures, non-profit organizations lead to an increase in the level of civil consciousness of the population, its political activity, and the degree of participation in public affairs. As a result, the possibility of confronting the bureaucratization of the state apparatus and its corruption increases, the influence of the population on decision-making in the interests of society as a whole increases.
One of the acute, constantly discussed problems is the problem of the efficiency of the public sector of the economy.In essence, this is the problem of the correlation between the efficiency of economic development and fairness and equality in consumption. The private sector is considered to be more efficient than the public sector. It develops on the basis of competition, which contributes to the formation of market equilibrium. On this basis, buyers can maximize their choice of goods and services, and producers can maximize profits.An economy is considered efficient if, with the available limited resources, the maximum possible amount of goods and services needed by society is produced under given conditions.At the same time, according to the economic theory of welfare, the optimal variant of the distribution of resources and finished products is such that it is impossible to redistribute them, improving the position of at least one person without worsening the position of others. Free competition creates the best conditions for efficient use of resources, entrepreneurial initiative and development of production.
This approach, despite its external logic, has several disadvantages. To determine the calculation of optimality, it is necessary to have information about consumer preferences, the volume of resources and the production of goods and services, production technologies, costs, profits, substitution rates, etc., which, if possible, then in a really functioning market, while information for regulation is needed early. Many economists (in particular, those of the Keynesian direction) believe that the economy does not strive for equilibrium at all, or strives, but never reaches it. Nevertheless, the theoretical provisions of welfare economics are widely used in economics, since they provide an opportunity to compare the real economy with a certain model, which it is desirable to strive for. At the same time, this approach is used to justify limiting state intervention in the economy, since such intervention violates the conditions of free competition and may lead to a slowdown in growth or a decrease in production efficiency. We have already mentioned the reasons for the participation of the state in economic life, due to the fact that it is an integral part of the economy and, in addition, allows you to eliminate the flaws inherent in a market economy. In connection with the problem of the effectiveness of state participation in economic life, it is appropriate to say that along with such an important criterion of socio-economic development as efficiency, there is the concept of equality and justice. The efficiency criterion does not offer tools for solving this problem. Even in an ideal model, there is room for excessive wealth among some segments of the population while the poverty of other social groups. The market mechanism is aimed at income differentiation and, as a consequence, exacerbation of social tension. In this connection an important factor participation of the state in the economy is the development and implementation of state social security policies aimed at supporting the poor on the basis of income redistribution mechanisms. Undoubtedly, the withdrawal by the state of part of the profit from production can hinder its development, but the well-being of the unemployed, pensioners, the disabled and other people in need who are not able to provide the necessary level of living goods on their own is improved. This makes it possible to avoid the heat of social contradictions.
major problem government bodies is the inequality of the standard of living of individual regions of the country, associated with differences in the levels of economic development. Residents of different regions of the same country have the right to approximately the same standard of living. In federal states, to which Russia also belongs, the structure of state power presupposes the existence of both central state authorities and authorities of the members of the Federation with a division of powers between them. One of the tasks of the authorities is to solve this problem based on the need to more fully ensure the principle of taking into account the characteristics of individual territories and the principle of territorial justice.
The principle of maximum consideration of the interests of the population of specific territories.The sphere of responsibility of the authorities in the provision of public goods is largely related to the size of the territory, the number and interests of the population for which they are intended. Responsibility and authority in this regard should be placed as close as possible to the consumers of services. The more and to a greater extent services affect the interests of the population of a given specific territory, requiring consideration of local characteristics, the lower the authority and responsibility for their provision should be concentrated. In other words, the authority, responsibility and costs of their provision should be assigned to the level of management that has power over the territory where consumers of this type of service live, and which can ensure the quality implementation of this service. Services that are used only by residents of the smallest link in the existing administrative-territorial division (for example, an urban area) should be provided by the lower link of local (municipal) self-government. Services that are used simultaneously by residents of all districts of the city or rural area, must be provided by the authorities of the city or district; services common to all residents of the region belong to the regional level, and services common to all residents of the country belong to the federal level. When determining the level of responsibility, local and national characteristics of individual territories play a significant role. Generally for education, health, housing more effective concentration of responsibility and authority at the regional and local levels; for foreign policy, defense at the federal. At the same time, the higher the interest of the central level of government in the implementation of any projects in the regions and municipalities, the more grounds for allocating funds for them from the federal budget.
Territorial Justicemeans the equalization of citizens' access to the basic benefits provided, regardless of where they live. The implementation of this principle means, in particular, that the main functional areas of social spending in all regions and municipalities should ensure the implementation of minimum state standards. Local (municipal) governments, according to the constitutions of many countries, including Russia, do not belong to state authorities. It is believed that the principle of local self-government should be implemented in local (municipal) formations. Local self-government within its competence independently. Russia has ratified the European Charter of Local Self-Government, according to which Art. 12 of the Constitution of the Russian Federation stipulates that “local self-government is recognized and guaranteed in the Russian Federation”. Public authorities, which include the authorities of the regional level, should not interfere in the resolution of issues of local self-government. Local self-government is exercised by the people themselves through their directly elected representative bodies. The jurisdiction of local authorities includes issues of life support for the population of territorial administrative entities. The implementation of this principle in Russia has not yet been completed, the financing of expenditures for the provision of services and social payments is largely carried out at the expense of regional budgets. In addition, they carry out the direct provision of services to the population in the field of education, health care, housing and communal services, etc. In this regard, in this textbook, the economic activity of the public sector is considered taking into account the activities municipalities.
The standard of living of the population in the regions and municipalities of large states depends on the level of their economic development. The more developed this or that territory, the more opportunities it has to provide services to the population. Meanwhile, citizens of one country have equal grounds for exercising their constitutional rights and a guaranteed minimum of state and municipal services. If the differences between territories are not very large, then difficulties are quite easily overcome through tax policy and interbudgetary relations, which ensure the accumulation of funds received from taxpayers by the central government and their redistribution to less developed territories. Russia is characterized by an extremely large differentiation in the levels of development of various regions and, as a result, a huge difference in the incomes of various regions of the country. These differences developed in different periods of the country's history. The reasons for the problems of the regions can be historically developed backwardness, lack of natural resources, lack of capital to use available resources, the decline of the leading industries of the regions, etc. The market in these cases does not correct the situation. In this regard, the problems of leveling the levels of economic development, maintaining the living standards of the population of regions in difficult economic conditions are subject to consideration. economic situation, and the role of the public sector of the economy in their solution.
The sphere of activity of the national public sector of the economy also includes economic transactions with foreign partners and the regulation of foreign economic relations of the entire national economy.Development of international trade and movementcapital gave impetus to increased involvement of countries in world economic processes. This is due to the emergence of new information systems, the desire to overcome the limitations of state bodies within selected countries, the capabilities and desire of highly developed countries to use their advantages associated with the production of products of higher stages of processing, high-tech and science-intensive, as well as wide opportunities for the use of international currency and stock markets. Providing a number of advantages, joining global economy poses major risks, especially for developing countries. Many of them fear that an open economy will make them vulnerable to capital flows in international markets. financial markets, jeopardize the stability national currency hinder the development of the national sector of the economy. The market mechanism is not able to independently protect the interests of national production in relations with other countries. In this regard, the state regulates foreign economic activity. The purpose of state regulation of foreign economic relations is the implementation of certain protectionist measures to protect the national economy and help domestic producers to penetrate and gain a foothold in the markets of other countries.
The function of the state in these processes is the development and implementation of a national policy that allows using the benefits of globalization and minimizing its negative aspects. Under these conditions, nation-states use customs and currency policies and other instruments of protection national interests, achieve with their help strengthening positions in the international markets of goods, services and capitals, equal relations with international economic organizations.
The fulfillment of the functions of state administration bodies implies the empowerment of them with special rights, which are deprived of private institutions. The state has the right to make binding laws, to punish non-compliance with them, to establish taxes, to call for military service and maintain an army. A number of state administration functions are carried out on the basis of coercion. This is one of the important differences between the activities of the public administration sector and the private sector and from the activities of enterprises owned or controlled by the state, where everything is built on a contractual basis.
When analyzing the activities of the general government sector, two main approaches can be used: normative and positive. At regulatory approach focuses on what the government should do. It is aimed at identifying the role of the state in the economy, setting development goals, formulating and justifying ways (programs) to achieve them. Positive the approach is aimed mainly at explaining what the state is really doing, identifying the consequences of its activities, economic and political forces that are interested in and practically implementing certain programs of action. Both approaches will be used in later chapters.
Question 2. Main activities and public goods provided by the public sector of the economy.
Both for the economy as a whole and for the economy of the public sector of management there is a problem of choice in the use of available limited resources.At all stages of socio-economic development, it is necessary to decide what to produce, how to produce and for whom to produce.
When deciding what to produce, a choice must be made between public goods provided to the public free of charge, and goods and services produced and sold on a commercial basis. Public goods are produced by the general government sector. Paid goods and services are produced by non-financial corporations, financial corporations, non-profit institutions serving households, and households. At the same time, non-financial and financial corporations also include state-owned enterprises that manufacture and sell products on a commercial basis. They can extract minerals (coal, gas, oil, ores, etc.), produce cars and other products.
The resources of the economy are limited. Therefore, an increase in the expenditure of resources on public goods leads to a reduction in the production of goods and services on a commercial basis, and vice versa. These circumstances predetermine the general limit of the possible scale of free public goods. This border is quite flexible, but the provision of an excessive amount of public goods compared to the possibilities of the economy leads to an increase in taxation and for a certain limit to a reduction in production growth. In this regard, there is a problem of distribution of resources between the sectorpublic administration and other sectors of the economy operating on commercial principles.
Another question is how to produce. To what extent should the state itself produce the goods and services it has assumed responsibility for providing, and to what extent should it acquire them from private firms? This question can be answered in different ways with respect to certain types activities. In many countries, electricity, telephone and postal services are produced mainly by state-owned enterprises, while at the same time only a small part of public spending on education goes to private schools. Points of view are different. There is an opinion that the transfer of production to private hands leads to infringement of the interests of consumers; on the other hand, it is argued that state-owned enterprises are less efficient than private ones.
Along with the question of the total volume of production of public goods, the essential question is for whom to produce. People's interests are ambiguous. Part of the population prefers one public good, the other others. For public authorities, this issue is sometimes quite difficult to resolve. In this regard, collective choice plays a significant role.
The general needs of all citizens of the country are provided primarily by law. At the same time, the consistent implementation of adopted laws, the development and implementation of a development strategy and economic policy, and the predictability of the actions of state bodies, the practical implementation of socio-economic policy are no less important than the laws themselves. This is the aim of the executive branch of power, the delimitation of responsibilities between central, regional and local authorities, as well as the formation state structures providing control over the observance of legislative acts. The objective of this paragraph is a general overview of the types of economic activities carried out by the public administration sector, the public goods (services) provided to them, the specific tasks that its activities are aimed at, ways to achieve goals, i.e. ideas about the main types of economic activities of the public administration sector. In later sections of the tutorial, they will be discussed in more detail.
Due to the diversity of economic activities carried out by the public sector, the general definition of the subject needs to be specified. The activities and related public goods produced by the general government sector can be classified according to various criteria depending on the tasks being solved. It seems that the classification of activities based on the functions performed by the public sector of government and the types of public goods provided associated with them, which is also used in the functional classification of public expenditures, is of the greatest importance for the practice of distribution of public goods.
General government activities that provide relevant public goods can be grouped into three broad groups: general civil services (general public services, defence, public order and security), economic development activities, and social activities. Along with this, reproductive processes in the public sector, relationships with other sectors of the economy and foreign economic relations are subject to consideration. Let us consider successively the above groups of activities of the public administration sector.
2.1. Provision of general public services. Defense. Public order and security
Civilian services include general public services, national defense, and public order and security services.
General Public Services. Public services of general purpose primarily include the holding of elections, referendums and other events of a similar nature that ensure the exercise of democratic freedoms and the formation of legislative and executive authorities in accordance with the preferences of citizens. General services also include services provided by general services formed by authorities that are not related to a specific management function, in particular, economic and social planning services, a statistical service; services to promote basic scientific research. One of the most important tasks of the economic and social planning bodies is the formation and promotion of the implementation of the economic development strategy and economic policy. The strategy defines long-term fundamental guidelines for the development of production, distribution and use of goods and services, social aspects of reproduction, finance, foreign economic activity, and the development of civil society. It defines in general view a long-term set of actions aimed at implementing the concept of socio-economic development, and is designed to implement the trajectory and dynamics of the development of the country's economy, ensuring a significant improvement in the living conditions of the population, successful adaptation of the country to the changing conditions of the surrounding world and strengthening its economic and political positions.
The general task of general public services is to create conditions for the collective choice of preferences in the production and consumption of public goods. Citizens of the country consume the same set of them. However, the interests of individual citizens and social groups of the population are different and need to be harmonized. Such coordination in a democratic society is carried out by identifying the opinion of the bulk of the population. The authorities formed on an elective basis act as tools for identifying the prevailing opinion. During the election process, the population evaluates the electoral programs offered by various parties and determines their preferences. Thus, the population, by determining individual ideas about the usefulness of certain actions, comes to the development of collective decisions that determine the impact on production and income distribution.
In practice, operations related to servicing are also considered as general services. public debt and the provision of economic assistance to developing states directly or through international organizations.
Defense. National security services provide the construction and maintenance of the armed forces, civil defense, applied research and experimental developments in the field of defense. These services have contradictory effects on the economy. On the one hand, they provide government orders for production and create jobs, on the other hand, this is a direct deduction of resources that could be used to produce goods and services for the population. They must correspond to the possibilities of the economy and the budget and be controlled by civilian democratic institutions of state authorities that make military-political decisions.
Public order and security.The activities of law enforcement agencies are aimed at protecting the life, health, rights and freedoms of citizens, protecting property and the interests of society from illegal actions. These needs of the population are provided by the police, internal troops, the prosecutor's office, justice, courts, the penitentiary service, security agencies, agencies for controlling the circulation of narcotic drugs and psychotropic drugs, for preventing and eliminating the consequences emergencies, fire protection, migration service and other services. In the conditions of a market economy, in economic terms, the protection of property plays an important role, guaranteeing individual entities the right to own, use and dispose of property.
2.2. Activities of the public administration sector for the development of the economy and ensuring reproduction
Economic growth is ultimately determined by four leading factors: capital increase, research and innovation, use of natural resources, quantity and quality labor resources. The task of the state is to ensure the best development and use of these factors. In this regard, the main functions of the public administration sector in the economy (along with the formation of an economic development strategy, as mentioned above) are: creating conditions for the normal functioning of a market economy; formation of economic policy and assistance in its implementation; production support and innovation activities; development and implementation of labor policy; price regulation; administrative regulation of the economy.
Creation of conditions for the normal functioning of a market economy.The main conditions for the functioning of a market economy are to ensure the legislative foundations of the market economy, the organization and regulation of money circulation and credit, maintaining a competitive environment, macroeconomic regulation of socio-economic development and ensuring the dissemination of information.
Formation of the legislative foundations of a market economy and measures for their implementation.Legislative activity involvesbuilding the institutional foundations of the market and determining the proportions (ratios) of coexisting and complementary market and state mechanisms securing a market economy. A necessary prerequisite for a market economy are such fundamental acts as Civil Code, laws on joint-stock companies, valuable papers oh, land, mortgage, bills, etc. Legislative and other normative acts determine the procedure for owning property, the rules for the functioning of markets, and regulate the activities of enterprises. They must ensure sustainable legal framework economic relations and the rule of law in the country, the economic and legal basis for activities in the market.
Organization and regulation of money circulation and credit.Market economy unthinkable without money circulation and credit. The implementation of this function is directly carried out by the national (central) bank of the country. National Bank refers not to the general government sector, but to the sector of financial institutions. However, it is the property of the state, which controls its work and uses it to regulate money circulation and credit due to its inherent role as the coordinator of economic activity in the country.
Maintaining a competitive environment, antimonopoly policy.
The efficiency of a market economy is most fully manifested in conditions of competitive production, which ensures cost minimization. However, in real life, due to the instability of the market system, the desire to maximize profits and suppress competitors, there is a tendency to monopolize production and monopoly price setting, which reduces production efficiency, leads to overspending of resources, unreasonable excess profits, and losses for consumers. In Russia, according to the data given by the chairman of the all-Russian public organization " Business Russia» B. Titov, «Three years ago, 80% of GDP was produced by 1200 companies, and now only 500». The market system is not able to cope with these processes on its own. The fulfillment of this task is a function of state control and regulatory organizations that ensure the maintenance of conditions for free competition and the restriction of tendencies towards monopoly, the protection of consumer interests, the regulation of activities in the field of securities, control over natural monopolies and etc.
macroeconomic regulation.Considering that the market mechanism does not provide sustainable macroeconomic equilibrium and, in particular, the balance between supply and demand, investment demand and the supply of savings, a major area of state economic policy is activities aimed at ensuring economic stability, creating conditions for economic growth, smoothing the negative impact economic cycles. At the same time, more and more attention is being paid to long-term problems associated with scientific and technological progress, economic restructuring, capital accumulation, and effective economic growth. The redistribution of resources between sectors of the economy, social groups and territories is an important lever for the restructuring of the economy and the implementation of targeted programs.
Ensuring the dissemination of information.To make decisions, business entities must have information about the supply and demand of goods, prices for manufactured goods and production factors, competitors, market forecasts, etc. Information costs are important view transaction costs. Meanwhile, the market mechanism is not able to independently ensure its distribution. Not all market participants are able to have the necessary information. The reasons for this are varied. Some do not have the means to gather information. Many types of information are available or become known faster only to some business entities, for example, because of their proximity to the government or other decision-making authorities, because of their social status and for other reasons. The uneven distribution of information concerns not only exclusive, but also publicly available information, despite the development modern means connections. Those with information are in a better position than their competitors. In this regard, the state assumes the function of determining the amount of information subject to mandatory disclosure and establishing the procedure for publishing data.
State support for production, investment and innovation activities.Along with the creation of conditions for the effective functioning of the market economy, public authorities carry out practical activities aimed at developing and implementing targeted programs of a state or regional nature, ensuring a balanced development of regions, and creating new jobs. Government bodies support important and promising industries and industries, finance research and development, innovation, promote the development of domestic and foreign trade, regulate the activities of individual industries, etc. The leading direction of economic activity to support production is the implementation of large-scale projects that cannot be implemented by private business, programs for the development of industries that are of particular importance for ensuring the country's security. These industries include the space and nuclear industries, the defense industry, etc. This activity contributes to building up the country's economic potential, innovative development, structural restructuring of the economy, technical re-equipment and modernization of production.
A significant part of investments in economic infrastructure (construction of main railways and highways, communication lines, industrial water supply systems, treatment facilities, etc.) is carried out at the expense of the funds of authorities at various levels, as well as the costs of their operation. These investments indirectly contribute to the development of entrepreneurship.
One of the most important instruments of state influence on the economy is financial policy - a set of measures in the field of taxation and government spending aimed at changing the real volume of production, controlling inflation and increasing employment. financial policy government, determined by its actions in the field of revenue generation, the volume and directions of public spending, can be aimed at stabilization, economic growth or restriction of business activity.
Based on the regulatory system, the state is able to actively influence the nature and results of market activity in the interests of society as a whole. Most of the developed countries in the early stages of development used one or another way to stimulate the development of the market. In the relatively recent past, Japan, South Korea, and a number of other countries, in addition to creating the institutional foundations of the market and conditions for free competition, used various methods to support the economies of their countries. For these purposes, in particular, subsidies for strategic directions of development were used, assistance was provided to the development of infrastructure, exports, protection domestic market. Depending on the specific conditions, one or another currency, trade, credit and industrial policy. The implementation of these measures was based on the effective operation of a strong state.
The center of gravity of the economic rivalry of states has shifted to the sphere of science, engineering and technology. At the same time, it is taken into account that innovative development is the main factor in GDP growth, leads to an increase in the share of new, more efficient goods and services in it, and significantly strengthens the position of countries exporting science-intensive products. However, corporations show little interest in organizing research and development, especially at the initial stages, when they are associated with high risks and do not promise quick profits. In this regard, the state promotes scientific developments both through direct funding and by providing incentives to corporations conducting research activities. State funding of research work is also due to the fact that the implementation of large scientific and technical programs is beyond the power of even large private corporations; in many cases, their implementation requires the unification and coordination of the efforts of financial and industrial groups and research centers. In addition, the state finances research work of defense importance and bears the costs of training scientific personnel.
Development and implementation of labor policy.The public sector of the economy carries out the general management of labor activity in the country. It ensures the formulation and implementation of labor policies and labor standards (eg working hours, working hours, wages, safety and other working conditions). Government bodies develop and implement measures to reduce unemployment, ensure the functioning of employment and arbitration organizations, implement programs against discrimination in the labor activity of certain groups of the population by sex, age, nationality, programs to reduce unemployment in underdeveloped regions and regions with high level unemployment.
Pricing.The actual direction of activity of state administration bodies is the formation of mechanisms and regulation of prices for public sector services, as well as the impact on the prices of goods and services of the private sector.
Administrative impact on the economy. The subject of concerns of the public administration sector is also the organization of the activities of patent offices, trademark registration services, copyright, standardization and metrology services, time services, exploration and survey services in the field of hydrology, geodesy and cartography, and organization of consumer protection.
Reproduction in the public administration sector.The existence and development of society is ensured by a continuous process of reproduction, the essence of which is the production of goods and services, their consumption and renewal. The public administration sector is an active participant in the reproduction process. In this regard, the production, distribution and use of gross value added in the sector itself, its interaction with other sectors and the efficiency of resource use are the subject of consideration. Reproduction on the scale of the national economy is a synthesis of complex interrelated and interdependent reproduction processes occurring in its sectors. The analysis of reproduction in individual sectors of the economy involves the use of the same theoretical and methodological approaches as the analysis of the economy as a whole, taking into account the characteristics of these sectors and their role in the overall reproduction process. This also applies to the public administration sector.
The leading indicators characterizing the scale of production in the public administration sector are the volume and growth of gross value added, its specific content, taking into account changes in the structure and qualitative changes. In Russia in 2005, the gross value added of this sector amounted to 1.9 trillion rubles, or 9% of the gross value added of all sectors of the economy.
The public administration sector is the owner of significant fixed assets: administrative buildings, housing, schools, clinics, hospitals, buildings and structures for cultural and sports purposes, defense facilities, etc. This component of the entire capital of the country needs constant development and renewal. Gross fixed capital formation includes the creation and acquisition of fixed assets (net of disposals), the costs of major improvements to them, the costs of improving non-produced assets, and the costs of transferring ownership of non-produced assets. In Russia, in the public sector of the economy, at present, the gross fixed capital formation is approximately 5 times higher than its consumption, however, due to the persistence of a large amount of obsolete fixed assets, the degree of depreciation of fixed assets continues to increase. At the same time, government bodies in 20032007 used only a quarter of their savings for savings.
A difficult aspect of the analysis is the growth factors of the general government economy. If in relation to the corporate sector of the economy we can say that the initial development factor is the aggregate effective demand, which encourages an increase in production, then the public administration sector provides services mainly free of charge and the motives for its development are related to its internal needs and the need to perform its functions in relation to other sectors of the economy, and above all to the household sector. At the same time, the final consumption and accumulation of this sector exceed the value of its own production, and overall size goods and services provided by them to other sectors is determined mainly by the amount of purchases in the corporate sector at the expense of tax and non-tax revenues budget.
2.3. Types of activities of the public administration sector in the social sphere
In developed countries, the public administration sector develops and implements a set of measures that contribute to the formation of human capital and post-industrial society. The most important components of the activities of the public administration sector in the social sphere are the regulation of income, prices and employment, ensuring the development social infrastructure, education, healthcare, culture, organization of a system of social guarantees and social protection population,environmental protection. The scale of state participation in the social sphere depends on the type of public sector economy that has developed in various countries, the predominance of a liberal or socially oriented direction in the views on the ongoing economic policy, the degree of regulation or deregulation of socio-economic development. The activities of government bodies in the social sphere are designed to solve two main conflicting tasks. One of them is to ensure sufficiently high living standards for the population and to achieve social consensus on this basis. On the other hand, social policy is designed to stimulate economic activity population. In the conditions of a market economy, which is characterized by significant gaps in income levels of various social groups of the population, unemployment and other social ills, the need to improve living standards and reduce poverty is justified by the requirements of ensuring social justice.
A negative feature of the market economy is the tendency towards an increase in income differentiation, social inequality, an increase in the absolute number and proportion of the population with incomes below the subsistence level. A significant part of the income is the result of the use of funds received earlier (property income). This leads to a concentration of wealth among the owners of capital, while for wage earners the main income is wages. From the point of view of the ethics of a market economy, the receipt of any income on the basis of market transactions recognized by law is fair. As a result, there is a tendency to accumulate wealth and luxury at one extreme and poverty and misery at the other. The market economy is indifferent to social and moral requirements, if this does not contradict economic principles market economy organization. Po st inequality leads to negative social consequences and public discontent. In order for people to receive incomes that ensure a worthy existence from the generally accepted point of view, state intervention is required.
The accumulation of funds in the budget allows the state to implement social programs aimed at developing a person, culture, healthcare, education, supporting families with low incomes, and solving the housing problem.
One of the most important tasks of the state is to ensure the most equitable distribution of benefits among members of society. By carrying out this activity, the state reduces social differentiation through the redistribution of income, material goods and services on the basis of taxation and the implementation of social programs. It has to do with spending public funds on education, health care, ensuring the property and personal security of citizens. Social politics can contribute to the reduction of poverty and inequality, contribute to the improvement of the conditions for the development of economically backward regions inhabited by national minorities, as well as the so-called unpromising regions, eliminating the ground for political and social instability.
At the same time, from the standpoint of liberal economists, in order to increase the efficiency of the economy, motivate entrepreneurial and labor activity, the necessity of reducing social programs and a corresponding reduction in taxes is substantiated. The situation is complicated by the fact that raising living standards, especially in countries with a relatively low level of development, is required, as they say, here and now, while raising living standards through increasing production efficiency is expected in the indefinite future.
In the process of economic development in the XX century. periods of reduction or expansion of social programs and, accordingly, public goods changed places, but the general trend was to increase the scale of state participation in the social life of society, and each time the decrease was carried out relative to the higher level achieved.
State bodies largely insure citizens against a number of threats to their economic security. This is carried out, in particular, through pensions for old age, medical insurance in case of illness, unemployment insurance. In a number of countries state forms insurance are basic. In others, the private sector bears the bulk of the costs. The most developed are European-style insurance systems. However, many developing countries, for example, China, India, Brazil, cannot yet afford the introduction of such systems due to the insufficient level of economic development.
The production of goods and services is often associated with positive and negative side effects, so-called externalities for other individuals and organizations. So, for example, aboutlaying a railway or a highway can have a beneficial effect on the development of individual regions, and the construction of a chemical plant without sufficient treatment facilities leads to air and water pollution. Positive “externalities” are met favorably, while negative ones create problems in the economy and society, because they degrade the environment and cause additional costs for businesses and individuals affected by them. In the case of negative “externalities”, there is a benefit for producers at the expense of damage to neighbors. The market mechanism, as a rule, is not able to independently resolve such contradictions. This requires the intervention of the state, which establishes the rules governing the protection of the environment and measures to prevent and eliminate harmful external effects.
State regulation of environmental protection is carried out on the basis of state legislative norms, budget spending the state itself, the impact on private business through market mechanisms, attracting the attention of public opinion, information, etc.
2.4. Economic activities of enterprises owned or controlled by the state
The main groups of enterprises owned or controlled by the state are non-financial enterprises and enterprises in the financial and credit sector.
non-financial enterprises.The scope of activity of state enterprises that produce goods and services on a commercial basis are: production in which private firms do not show interest; areas where large initial investments are required that are beyond the power of private entrepreneurs; productions associated with high risks; areas of activity where the participation of private capital is undesirable for the state. Such enterprises may include postal enterprises, supply of water, gas, electricity, heat, nuclear industry, defense plants, etc.
A large area of activity of non-financial state enterprises are the branches of natural monopolies. Undernatural monopoly productionunderstand industries in which efficient operation is possible only with sufficiently large volumes of products or services and at the same time the existence of competitive industries is impossible, extremely difficult or difficult to implement. The condition for the existence of a natural monopoly is a situation in which the economies of scale due to technological features are so significant that low unit costs and, accordingly, low prices are possible only with very large production volumes. At the same time, the only enterprise in the industry can provide the needs for products or services of this type with costs per unit of production significantly less than two or more competing enterprises.
Such industries include railway transport, electric power companies, enterprises for the extraction and transportation of oil and gas through pipelines, post office, telephone companies, water and heat supply enterprises, sewerage, cable television, car roads etc. Indeed, the existence of two parallel railways means twice the cost of infrastructure. The presence of several urban power companies entails high costs for the construction and operation of parallel high-voltage networks. Meanwhile, the production of natural monopolies have, as a rule, low marginal costs. For society as a whole, the monopolistic organization of production in these cases turns out to be economically more profitable than the creation of competing enterprises. A reduction in production volumes for each individual enterprise in the event of the emergence of parallel production and the division of the market between them would lead to an increase in the cost of products and services of each of the competitors and, accordingly, to an increase in prices for consumers. In this sense, enterprises that can produce a certain amount of output at a lower cost than two or more firms producing the same amount of output can be considered monopoly enterprises. State-owned enterprises may also include state-owned defense industry enterprises, port facilities, state organizations for creating reserves of strategic stocks of food and other goods, organizations engaged in leasing state property, etc.
State enterprises can be used to implement the most important state programs. The overall funding needs of the general government sector and non-financial public enterprises and the ability to meet it are important indicators the total volume of operations they perform and the impact that they have on the state monetary system countries.
The activities of state-owned or controlled enterprises can be aimed at accelerating investment and innovation in areas where private capital does not show interest in this, since profits may not appear soon. So, in order to speed up the use of scientific achievements in the production of products that are in demand on the market, in Russia in 20062007. began to be created public corporations. Nanotechnology Corporation established.
In Russia, the public sector includes a significant proportion of corporations classified in the SNA as non-financial corporations. This refers, in particular, to such corporations as OAO Gazprom, RAO Russian Railways, OAO United Aircraft Corporation, OAO United Shipbuilding Corporation, many defense plants, enterprises for the extraction and processing of about a quarter of oil, etc.
The activities of state non-financial enterprises are criticized for their lack of efficiency, expressed in increased costs and low profitability and even unprofitability. In the absence of competition, as in the case of natural monopolies, there is no incentive to be efficient. In practice, governments tend to make such enterprises self-financing, but in many cases subsidies have to be used.
Increasing efficiency is an urgent task, but one should not lose sight of the fact that in some cases, as, for example, in the case of natural monopolies and many defense enterprises, it is difficult for the state to abandon these enterprises. In addition, the target function of state enterprises in many cases is a more complete use of the resources of the economy, providing employment, maintaining and stimulating economic growth. These goals are achieved under conditions unacceptable for private capital due to their financial unprofitability. At the same time, the functioning of such enterprises is necessary from the standpoint of the economy as a whole. It should also be taken into account that in modern Russian economy a number of state-owned enterprises, in particular those engaged in oil and gas production, are highly profitable and make a significant contribution to budget revenues.
The financial transactions and account balances of such public enterprises are not included in general government finance because their nature of activities is different from that of the sector and their production and financing objectives are not based on for public policy reasons.
Financial and credit institutions.In almost all countries, the state organization is central bank. He governs money issue, exercises control over the amount of credit, manages the country's international reserves, exercises general control over the monetary system. The state may also own other financial and credit institutions that accept transferable deposits on demand, term and savings deposits hosting financial obligations and acquiring financial assets. Such institutions are, for example, Sberbank of Russia, state investment banks.
Institutions and activities of this kind carried out within the framework of the public sector of the economy do not belong to public administration. All functions related to financial and credit operations, regardless of which institutional units they are performed, are considered as activities of the financial corporations sector, and not the general government sector. In public finance, only the final transactions between the general government sector and the financial and credit sector are taken into account, which reflect clean stream funds flowing into or out of the sector as a result of such operations.
CONCLUSIONS
- The public sector of the country's economy is understood as a sector that represents and serves the interests of the entire population. The main activities of the public sector of the economy are the provision of public goods, usually free of charge, the redistribution of income and wealth and the provision of social assistance to the population, as well as the production and sale of goods and services on a commercial basis by enterprises owned or controlled by the state. Due to its special role, the state can also influence the economic behavior of business entities through the adoption of legislative and other regulations, taxation, subsidies and other measures to regulate economic activity.
- The constituent parts of the public sector are the general government sector and enterprises owned or controlled by the state, but related, according to the system of national accounts, to non-financial and financial corporations. The basis of the public sector is the public administration sector, in relation to which public finances are also formed.
- The main functions of the general government sector are the provision of political and regulatory activities, the provision of goods and services on a non-market basis for their collective or individual consumption by members of society, and the redistribution of income and wealth through transfers and subsidies.
- State participation in the economy is usually associated with the contradictory nature of the market economy itself, which is unable to solve a number of complex problems of socio-economic development, the so-called market failures. There are, however, factors that make it inevitable for the public administration sector to participate in economic life, regardless of market failures. On the one hand, they are a tool for organizing political and economic activity in the country, allowing members of society to coordinate their actions to achieve common goals. On the other hand, the performance by the public administration sector of its functions of coordinating the activities of citizens is based on the right of ownership of its institutional units to notbypassed for this property, on the accumulation and expenditure of funds. The general government sector accumulates and spends almost a third of the country's gross disposable income. The number of employees in the public sector, together with employees employed in enterprises owned by it, is more than 30% of all employed in the country. Due to these features, the public administration sector becomes one of the sectors of the economy in the market economy, carrying out economic and financial transactions with other sectors in all areas of economic life. Another circumstance predetermining the participation of the public administration sector in economic life is the need for the formation and constant adjustment of the institutional foundations of a market economy.
- At all stages of socio-economic development, it is necessary to decide what to produce, how to produce and for whom to produce. When deciding what to produce, a choice must be made between public goods provided to the public free of charge, and goods and services produced and sold on a commercial basis. The resources of the economy are limited. Therefore, an increase in the expenditure of resources on public goods leads to a reduction in the production of goods and services on a commercial basis, and vice versa. These circumstances predetermine the general limit of the possible scale of free public goods. This limit is quite flexible, but the provision of an excessive amount of public goods compared to the possibilities of the economy leads to an increase in taxation and, beyond a certain limit, to a reduction in production growth. In this regard, there is a problem of distribution of resources between the public administration sector and other sectors of the economy that operate on commercial principles. Another question is how to produce. To what extent should the state itself produce the goods and services it has assumed responsibility for providing, and to what extent should it acquire them from private firms? This issue can be addressed differently in relation to individual activities.
- General government activities that provide relevant public goods can be grouped into three broad groups: general civil services (general public services, defence, public order and security), economic development activities, and social activities.
TERMS
boons
public goods
Government sector
General government sector
SELF-CHECK QUESTIONS
- Define the public sector of the economy.
- What is the difference between the public sector of the economy and the government sector?
3. Name the main factors that predetermine the need for the public sector of the economy.
4. Describe the scope of the public sector.
5. What are the main public goods provided by the public sector of the economy?
TOPIC 1. THE PUBLIC SECTOR IN THE MODERN MIXED ECONOMY
The subject of economics of the state and municipal sector
The dialectics of the development of society is connected with its dual nature. FROM On the one hand, it is the relationship of society with the individual; on the other hand, it is the relationship of society with the state. In the economy of the public sector, state regulation of the institutions of society and man is combined. The feedback system of the state, society and a person is one of the most difficult theoretical and practical problems of increasing the efficiency of the public sector. Man does not exist for the state, but the state exists for man.
Economics of the Public Sector - Fundamental Science, which means that its methodology is based on objective universal laws, perceived from the standpoint of dialectical development. The economics of the public sector is studied at the intersection of economic theory, sociology, political science and psychology.
The theoretical basis of the course is a combination of political economy, institutionalism, micro- and macroanalysis, the world economy, the economy of the public sector of foreign countries. This is especially important, because in the context of globalization, the economy of the public sector in Russia and other countries retains its historical traditions in the relationship between the state, society and the individual.
The subject of study of the economics of the public sector- the role and functions of the state as an economic entity of a market economy, interaction with other economic entities within the country and abroad. The economic activity of the public sector as a whole, at the federal, regional and municipal levels, as well as in the context of industries and types of economic activity, is subject to consideration.
Key Objectives of the Public Sector Economics Course:
Substantiation of the need for the development of the public sector in a market economy;
Theoretical substantiation of the need for state intervention in the framework of microeconomics from the standpoint of efficiency and justice;
Acquaintance with the theory of public choice, identification of problems and difficulties of state regulation of the economy;
Acquaintance with the tools and mechanisms of state intervention in the economy.
Main questions considered by public sector economics are:
The impact of the public sector on the level and living conditions of the population based on the production and provision of services on a non-market basis, social payments and the use of other instruments;
Formation of income, expenses and property of the public sector;
The impact of economic policy and economic activity of the public sector on other participants in economic activity and their economic behavior;
Production of goods and services by the public sector on a commercial basis.
The market economy of any country is a mixed economic system., consisting of the most important sectors - private and public. The variety of types of mixed economies, which arose as a result of the historical features of the formation of statehood, national mentality and other factors, led to the ambiguity of approaches to the interpretation of the concept of "public sector". Two approaches are most widely used.
The public sector is a set of economic resources at the disposal of the state and public organizations (including local governments). It is a part of the economic space in which:
1. the market does not operate or operates only partially, and therefore, the non-market way of coordinating economic activity, the non-market type of organization of the exchange of activities prevails;
2. not private, but public goods are produced, distributed and consumed;
3. The economic balance between supply and demand for a public (collective) good is ensured by the state, local governments and voluntary public organizations with the help of relevant social institutions, primarily through budgetary and financial policy.
In the public sector production is carried out economic benefits a special kind of public good. Between the market and public sectors of the economy, between the state and economic agents, there is an exchange of activities and flows of economic benefits. The public sector plays an active role in the circulation of income, resources, goods and services.
Since the public sector is dominated by the activity of the state, it is often referred to as the public sector. This identification of the public and state sectors is, to a certain extent, acceptable.
The purpose of the functioning of the public sector (through the mechanisms for implementing the stabilization function, as well as the functions of distributing resources and income) is the formation of a single socio-economic space in a certain territory.
The public sector includes three sub-sectors:
state,
voluntary public,
mixed.
On the one hand, the mixed sector occupies an intermediate position between the public and market sectors, and on the other hand, there is an adjacent zone within the public sector between the state and voluntary public sub-sectors.
The public sector of the economy: understanding in the narrow and broad sense. First of all, it must be said that there is no unified approach to defining and isolating the public sector into an independent concept. There are discrepancies here, which have target and national specifics. In this regard, at present, we can talk about two interpretations of the public sector: narrow and broad sense. Let's look at the first aspect first.
When determining the essence of the public sector, as a rule, they proceed from the fact that it is the most important component of the national economy. Wherein distinguishing feature public sector of the economy lies in the ability of the state to implement direct and operational management of economic entities included in its composition. The very management of economic entities of the public sector of the economy is carried out by state authorities through their representatives participating in the formation of the strategy and tactics of the activities of public sector enterprises.
Methodological basis definition of the public sector is the concept administrative and economic department legal entities (business entities). Administrative and economic management refers to the impact on the part of the manager (the head of the legal entity) on the activities of the legal entity, aimed at achieving the goal as quickly as possible. On the basis of this concept, the definition of the public sector is formulated:
Narrow interpretation of "public sector» - the public sector of the economy should be understood as a set of legal entities(economic entities), the administrative and economic management of which is carried out by the state through the federal and regional authorities of the country. It is assumed that the public sector is designed to represent the interests of members of society, therefore it is commonly called the public sector.
Broad interpretation of "public sector» - the public sector is understood as a set of economic resources owned by the state, all organizations through which state regulation of the economy is carried out. This and economic budget, government organizations in the field of management, healthcare, education, defense, state production enterprises, state lands, mineral reserves.
1.2. Economics of the public sector and economics of the public administration sector.
The modern economy is mixed. Economic activity in it is carried out by the public (public) sector, as well as private non-financial enterprises, financial-credit and other organizations, often united by the general concept of "private sector". The economy of the public (state) sector itself is also mixed. The components of the public sector are the general government sector and enterprises owned or controlled by the state, but related, according to the generally accepted division of the economy into economic sectors, to non-financial and financial corporations. . The basis of the public sector is the sector of public (public) administration, in relation to which public finances are also formed. Consider its place in the system of economic sectors of the economy.
At present, when compiling forecasts of socio-economic development, the formation of finance, the principles of constructing statistics and economic analysis the boundaries of sectors of the economy are determined in accordance with the system of national accounts, which is accepted all over the world. Thus, unified approaches to the study of the economy of the public sector and the economy of other sectors are provided. In the system of national accounts adopted by the United Nations in 1993, the public administration sector is singled out as one of the sectors of the economy.
According to this system, economic entities of the country (institutional units) that own and dispose of assets and enter into economic relations with other economic entities, in accordance with their functions and methods of financing costs, are combined into five institutional sectors of the economy:
Sector of non-financial corporations;
Sector of financial corporations;
public administration sector;
Household sector;
Sector of non-profit institutions serving households (NPISH).
Each of these sectors includes corresponding institutional units. Under Institutional Unit is understood as an economic entity (economic unit) that owns and disposes of assets on its own behalf, assumes obligations, enters into economic transactions with other institutional units, compiles a complete set of accounts, including a balance sheet of assets and liabilities. As economic entities, both legal entities (enterprises, government bodies, credit organizations, insurance companies, etc.) and households are accepted, since they are the centers of economic decision-making. Business entities have economic resources in constant circulation.
Non-financial corporations include institutional units (corporations and quasi-corporations) located in the economic territory of the country, the main function of which is the production of goods and non-financial services for the purpose of selling them on the market and making a profit. Production costs are reimbursed from sales proceeds. This sector includes, in particular, enterprises of industry, agriculture, construction, transport, communications, trade, etc.
The sector of financial corporations includes institutional units whose main function is financial and credit activities - monetary authorities, banks, insurance companies, non-state pension funds and other institutions engaged in financial intermediation.
Non-profit organizations serving households (population) include public non-profit organizations that provide non-market services to households. These are public organizations that include political parties, trade unions, religious organizations, various societies, unions and associations, as well as meet the needs in the field of education, health, culture, etc. They are funded by membership dues, donations and property income.
The household sector brings together individuals or groups of individuals who live together and share a common budget. Households manage their resources, have assets and liabilities, and engage in economic activities. These include households of people who work for hire, households of entrepreneurs, households of the self-employed (freelancers, owners of small unincorporated farms, family shops, cafes), households of people living on transfers (pensioners, students). This is a sector that mainly consumes goods and services and produces them for its own consumption and sale.
Sector of public administration. The public administration sector includes institutional units vested with the right to legislative, executive and judicial power in the territory of the country or its parts.
The main functions of the general government sector are:
Ensuring political and regulatory activities;
Provision of goods and services on a non-market basis for their collective or individual consumption by members of society;
Also the redistribution of income and wealth through transfers and subsidies. This predetermines its role as the basis of the public sector, its leading element. Respectively, the economy of the state (public) administration sector is the central link in the economy of the state (public) sector.
The public (public) sector is a broader concept than the public administration sector. It brings together the general government sector and state-owned or controlled enterprises and organizations that, like the private sector, produce goods and services on a commercial basis and are an integral part of the nonfinancial and financial corporations sectors.
1.3 Composition of the public sector of the economy by organizational and legal forms:
State unitary enterprises;
State (budgetary) institutions;
Joint stock companies, in the authorized capital of which the controlling stake of voting shares (more than 50%) is in state ownership (federal and / or constituent entities of the Russian Federation);
Subsidiaries whose main (parent) company belongs to the public sector;
Enterprises that are part of a holding whose parent company belongs to the public sector;
Joint-stock companies, in the authorized capital of which the controlling stake of voting shares (more than 50%) is owned by state unitary enterprises;
Enterprises, in the authorized capital of which there is a "golden share", which is in the hands of the state.
Main activities of the public sector economy:
Provision of public goods;
Redistribution of income and wealth and provision of social assistance to the population;
Production and sale of goods and services on a commercial basis by enterprises owned or controlled by the state.
Due to its special role, the state can also influence the economic behavior of business entities through the adoption of legislative and other regulations, taxation, subsidies and other measures to regulate economic activity.
Economics of the public sector and economics of the public administration sector.
Composition of the public sector of the economy by organizational and legal forms
1.4 Models of the public sector of the economy:
The concept of the state and municipal sector of the economy, its structure
The dialectics of the development of society is connected with its dual nature. FROM On the one hand, it is the relationship of society with the individual; on the other hand, it is the relationship of society with the state. In the economy of the public sector, state regulation of the institutions of society and man is combined. The feedback system of the state, society and a person is one of the most difficult theoretical and practical problems of increasing the efficiency of the public sector. Man does not exist for the state, but the state exists for man.
Economics of the state and municipal sector - fundamental science, which means that its methodology is based on objective universal laws, perceived from the standpoint of dialectical development. The economics of the public sector is studied at the intersection of economic theory, applied economics, sociology, political science and psychology.
The theoretical basis of the course is a combination of political economy, institutionalism, micro- and macroanalysis, the world economy, the economy of the public sector of foreign countries. This is especially important, because in the context of globalization, the economy of the public sector in Russia and other countries retains its historical traditions in the relationship between the state, society and the individual.
The subject of study of the economy of the state and municipal sector- the role and functions of the state and municipalities as economic entities of a market economy, interaction with other economic entities within the country and abroad. The economic activity of the state and municipal sector as a whole, at the federal, regional and municipal levels, as well as in the context of industries and types of economic activity, is subject to consideration.
The most important tasks of the course of economics of the state and municipal sector:
Substantiation of the need for the development of the state and municipal sector in a market economy;
Theoretical substantiation of the need for state intervention in the framework of microeconomics from the standpoint of efficiency and justice;
Acquaintance with the theory of public choice, identification of problems and difficulties of state regulation of the economy;
Acquaintance with the tools and mechanisms of state intervention in the economy.
Main questions considered by public sector economics are:
The impact of the sector on the level and living conditions of the population based on the production and provision of services on a non-market basis, social payments and the use of other instruments;
Formation of income, expenses and property state and municipal sectors;
The impact of economic policy and economic activity of the public sector on other participants in economic activity and their economic behavior;
Production of goods and services by the public sector on a commercial basis.
The market economy of any country is a mixed economic system., consisting of the most important sectors - private and public. The variety of types of mixed economies, which arose as a result of the historical features of the formation of statehood, national mentality and other factors, led to the ambiguity of approaches to the interpretation of the concept of "public sector". Two approaches are most widely used.
The public sector is a set of economic resources at the disposal of the state and public organizations (including local governments). It is a part of the economic space in which:
1. the market does not operate or operates only partially, and therefore, the non-market way of coordinating economic activity, the non-market type of organization of the exchange of activities prevails;
2. not private, but public goods are produced, distributed and consumed;
3. The economic balance between supply and demand for a public (collective) good is ensured by the state, local governments and voluntary public organizations with the help of relevant social institutions, primarily through budgetary and financial policy.
In the public sector the production of economic goods of a special kind - public goods. Between the market and public sectors of the economy, between the state and economic agents, there is an exchange of activities and flows of economic benefits. The public sector plays an active role in the circulation of income, resources, goods and services.
Since the public sector is dominated by the activity of the state, it is often referred to as the public sector. This identification of the public and state sectors is, to a certain extent, acceptable.
The purpose of the functioning of the public sector (through the mechanisms for implementing the stabilization function, as well as the functions of distributing resources and income) is the formation of a single socio-economic space in a certain territory.
The public sector includes three sub-sectors:
state,
voluntary public,
mixed.
On the one hand, the mixed sector occupies an intermediate position between the public and market sectors, and on the other hand, there is an adjacent zone within the public sector between the state and voluntary public sub-sectors.
The public sector of the economy: understanding in the narrow and broad sense. First of all, it must be said that there is no unified approach to defining and isolating the public sector into an independent concept. There are discrepancies here, which have target and national specifics. In this regard, at present, we can talk about two interpretations of the public sector: narrow and broad sense. Let's look at the first aspect first.
When determining the essence of the public sector, as a rule, they proceed from the fact that it is the most important component of the national economy. At the same time, a distinctive feature of the public sector of the economy lies in the ability of the state to carry out direct and operational management of economic entities included in its composition. The very management of economic entities of the public sector of the economy is carried out by state authorities through their representatives participating in the formation of the strategy and tactics of the activities of public sector enterprises.
The methodological basis for defining the public sector is the concept administrative and economic department legal entities (business entities). Administrative and economic management refers to the impact on the part of the manager (the head of the legal entity) on the activities of the legal entity, aimed at achieving the goal as quickly as possible. On the basis of this concept, the definition of the public sector is formulated:
Narrow interpretation of "public sector"- the public sector of the economy should be understood as a set of legal entities (economic entities), the administrative and economic management of which is carried out by the state through the federal and regional authorities of the country. It is assumed that the public sector is called upon to represent the interests of members of society, so it is customary to call it the public sector.
The broad interpretation of "the public sector"- the public sector is understood as the totality of economic resources owned by the state, all organizations through which state regulation of the economy is carried out. This includes the economic budget, state organizations in the field of administration, healthcare, education, defense, state production enterprises, state lands, and mineral reserves.
