Government with the channels of public sectors tries to maintain stability in the economic environment. Economy is something that leads its citizens to lead a sustainable life. A fall in the economy is as natural as its growth. The economic crisis involves recession, increased unemployment, devaluation, etc. The public sector aims to uplift the overall economy by facilitating balanced socio-economic environment. Some of them are explained below:
Government spending and tax policies influence the economy at a great extent. Providing sustainable growth and reducing poverty is the primary protocol the government follows during spending. The government mostly spends on public goods such as roads, defense, medical, education, welfare payments, pensions, unemployment, disability benefit, etc. These facilities are channeled through public sectors, and all these facilities have a direct impact on the society and its residents.
Externality refers to the side effects faced by various other participants in the economy because of one such economic activity. This needs to be resolved in order to bring in the balance and encourage the economy. Hence, the EPA (Environmental protection Agency) was formed in 1970 to offer public sector solutions to environmental externalities’ concerns. To address such problems in the economy, the public policy makers try to resolve by having
Strong price policy through corrective taxation and subsidies.
Regulations on quantity protocols.
Inequality is the cause of major social problems in society. It is a concern for public administrators. Hence, the government keeps introducing various measures and remedies to keep inequality at bay. Some of them are increasing minimum wages, expanding the earned income tax, building assets for working families, investing in education, etc.
Resources prevail everywhere until one knows to value them. Some are in abundance and some in scarce. In order to protect and prevent the resources from being misused, the government grants property rights. By assigning a particular concern by providing property rights, it is empowering the concern and levying the responsibility to look after the resources or property.
Public sector tries to strategize the optimal taxation policy to enhance or maximize social welfare.
Goals of the public sector
Enhance overall economic growth by encouraging industrialization.
Equality of income and Wealth by monitoring or supervising the economic growth of the nation.
Curb Unemployment: By setting up different verticals to increase the efficiency and thereby opening lots of vacancies. Public sectors try to maintain macroeconomic stability.
Equilibrium in regional growth: Proper identification of resources and logical approach to utilize those resources help to maintain a balanced regional growth. It tries to eliminate poverty.
To assist private sectors by funding when necessary.
International trade: Public sectors on a large scale try to improve international trade and welfare.
Funding for financial development.
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