Mixed administration

economic-dictionary

The mixed administration is one that is in charge of the management of both public and private capital. It includes all those organizations that are under the jurisdiction of the public and private sectors.

Mixed management is a commonly used management style. It consists of coordinating and managing in a multilateral way, between the public and private sectors, certain actions that are considered beneficial for society. These actions are carried out, mainly, in social policies that seek to meet the needs of the population and correct market failures suffered by a given economy.

The main objective pursued by the mixed administration is to guarantee the public interest by taking advantage of the efficiency and effectiveness of private management. This type of administration can be implemented both locally and internationally.

The role of the public sector in mixed administration

The public sector acts in certain sectors with the mixed administration format since it allows it to correct certain market failures that cause a reduction in the quality of life of society. In this way, the State will comply with the execution of the development plans and social progress that it has planned.

In addition to this, the public sector has the opportunity to offer the population a greater number of goods and services. This happens since it does not have the obligation to have the necessary infrastructure for its production.

Finally, with this type of action, private initiative is encouraged and the business fabric of a given geographic area is strengthened, something that has a very positive impact on society.

The role of the private sector in mixed administration

Mixed administration has certain peculiarities that make it interesting from the point of view of the private sector. This modality provides a large volume of clients since the State offers the goods and services produced to its citizens, allowing the company's income to increase.

On the other hand, working together with the Public Administration allows the organization to take advantage of certain economies of scale that the State may enjoy. In accordance with the above, you can also obtain certain privileges in terms of rates and taxes that have to be faced in a private company.

Finally, carrying out an initiative of this type allows reducing the risk involved in the investment. It is common for part of the capital to come from the State or even be endorsed by it.

Characteristics of mixed administration

Among the many characteristics of this type of administration, it is convenient to emphasize the following:

  • The initiatives implemented are focused on the benefit of society.
  • It reduces the entry barriers that a person or a company may have to produce in a certain sector.
  • It allows the State to make goods and services available to its citizens in a shorter period compared to the Public Administration.
  • The ownership of the company will be partially both public and private.

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