THE PUBLIC SECTOR AS A FACTOR FOR ECONOMIC DEVELOPMENT

Abstract

There is an economic necessity for the intervention of the state in the market economy. It is the one thanks to which defects in the market are corrected or which intervenes in the absence of private initiative for activities of public importance. In order to ensure prosperity for all members of society, the state organizes collective action, which the market mechanism cannot provide effectively. These issues, which are essential for the modern state and society, are addressed by public sector economics. Government policies in this sector can be very diverse and be directed towards the traditional goals of economic growth, price stability and social justice. Along with the reasonable regulation of the markets, the state must also provide the necessary public goods, among which the defense of the country, education, health care, etc. can be brought to the fore. As an essential difference between the economic and public spheres, we can point out that while the former is built on the principle of individualism and the ultimate goal is the maximization of benefit for each market entity individually, in the public sphere the leading rule is the creation, imposition and implementation of public interest and welfare of the maximum community.