Public service

economic-dictionary

Public service is that provided by the State, either directly or under its control and regulation. Thus, it seeks to ensure the supply to the population of certain products considered essential.

In other words, services are considered public when the Government provides them. This can be through state entities or companies.

However, there is also the possibility that the public service can develop it by a private one. This, provided that the company is subject to government supervision and control.

The State decides to take charge of the supply of certain services to satisfy basic needs and ensure minimum access to the population. It can be the case of water and electricity, for example.

Characteristics of the public service

Among the characteristics of the public service are:

  • Its price is usually subsidized to ensure that it is accessible to the population.
  • Competition between governments and private bidders may or may not be allowed.
  • The State does not provide it with the objective of obtaining benefits, that is, it does not respond to a profit motive.
  • Its proper functioning should help improve social welfare and equity among citizens.
  • It is financed with higher public debt or directly with the resources collected from taxpayers.
  • Access to public services is one of the factors included in the Human Development Index (HDI).

Types of public services

Public services can be classified into three:

  • Basic: They are those considered essential for the quality of life, and usually reach homes directly, such as drinking water.
  • Administrative: They are all those related to the procedures that are carried out in public institutions, for example, the acquisition of a driver's license.
  • Help: They are those that are provided in an emergency situation, when the integrity or life of the citizen is in danger. We are not referring, for example, to the police service.

Public service example

An example of a public service is, for example, the supply of electricity in Peru. In this case, the Government has concessioned the distribution to different private companies, such as Luz del Sur and Edelnor.

So, although the electricity service is not directly managed by an institution of the Peruvian government, it is in charge of granting the respective concessions. It also fulfills a regulatory role in the functioning of the market.

Public company

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