GENERAL ISSUES ABOUT

PUBLIC SECTOR AND PUBLIC

MANAGEMENT
Chapter 1
 CONTENT

1. Public sector

2. Public management

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 1. PUBLIC SECTOR
Public Private
sector sector
Creating
State ’s
products and
activities
services

Decisions by Decisions by
state firms

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 1. PUBLIC SECTOR
Budget for
Ownership
activities

Purposes and
Authorities of
regulations in
officers
using budget

Public sector

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 1. PUBLIC SECTOR
Definition: The public sector is a
state-owned area of ​operation,
the State invests capital, directly
or partially invested by the
private sector, and carries out
financial support from the state
and the state manage to create
products and services that serve
the essential general needs of
society

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 1. PUBLIC SECTOR
The role of public sector

A tool to inteverne to society,

assure the order of society
and general development

Govern the socio – economic

development as state’s
directions

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 1. PUBLIC SECTOR
Public sector governs the socio – economic development as
state’s directions

• Government • Government • Government

implements regulates directly supply
public society in order some goods
management to limit market and services
in key areas failures which private
sector cannot,
does not want
or is not
allowed to
supply

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 1. PUBLIC SECTOR
Characteristics of public sector

Depend on political Dominated by Mainly invested by

direction government government

Appropriate with
social general
Not for profit
development
targets

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 1. PUBLIC SECTOR
Scale of public sector’s activities

Producing and suppling

Public management
public goods and services

Government organizes goods and services to serve social

Assure the validity of laws
demand

Reflect state’s power Government buys goods and services from private sector

Government spends money, subsidies, incentives, hires

other economic entities to make goods and services

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 1. PUBLIC SECTOR
Main functions of government

Rule function Serve function

Manage, regulate, remain social order by Provide crucial goods and services for
state power society

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 2. PUBLIC MANAGEMENT
Administration vs management

Administration Management
Execute and operate a system to achieve its Management is an overarching activity that
goals controls all activities

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 2. PUBLIC MANAGEMENT
Administration vs management

Administration Management

Control input of process and the process Aim to the result

Public sector Private sector

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 2. PUBLIC MANAGEMENT
Administration vs management
Traditional
Public administration is
considered under the angle of
POTENCY ( ability to use law
and enforcement tools to
stabilize social order
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Modern
Public administration is
considered under the angle of
EFFICIENCY ( apply
management arts and sciencies
to specific circumstances,
leading leaders to use resources
effectively)
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 2. PUBLIC MANAGEMENT
The transformation from Public administration to Public
Management : from the alteration in awareness

Approach Public management as a state management activity in

a more positive and effective way, closer to the type of business
activities

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 2. PUBLIC MANAGEMENT
Private management vs Public Management
- Purposes
- Scale of influence
- Equity and efficiency
- Working process
- Method of impacting on management objects
- Operation
- Working time
- Human resources
- Evaluate management efficiency
- Relationship with press

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 2. PUBLIC MANAGEMENT

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 2. PUBLIC MANAGEMENT
Principles in Public Management

Principle No.1: State supports for the development of economic

components, including state economic

Content: Protect competitive activities in economy and encourage

effective competition between economic components

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 2. PUBLIC MANAGEMENT
Principles in Public Management

Principle No.2: compatiable with market economy principle: every

intervention of the government has to use market as a benchmark to
evaluate efficiency.

If State’s decisions go against the rules of market -> could cause

economic crisis

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 2. PUBLIC MANAGEMENT
Principles in Public Management

Principle No.3: A mixed economy co-exists base on social general

efficiency.

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 2. PUBLIC MANAGEMENT
Principles in Public Management

Principle No.4: Equity and efficiency, the economic trade-off that only
government can regulate

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 2. PUBLIC MANAGEMENT
Principles in Public Management

Principle No.5: Forcing people who cause social cost pay compensation

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 2. PUBLIC MANAGEMENT
Principles in Public Management

Principle No.6: The supply is based on collective decision because:

- The decision is often complicated and affect other sectors
- Good decisions -> high efficiency
- Wrong decisions -> negative impact for whole economy
- Summary benefits and demands of different groups of citizen
- Social criticism mechanism

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 2. PUBLIC MANAGEMENT
Principles in Public Management

Principle No.7: Income redistribution follows the principle of limiting

inequality and no one will lose

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 3. NEW PUBLIC MANAGEMENT
ORIGIN OF NEW PUBLIC MANAGEMENT

THEORY OF THEORY OF
PUBLIC CHOICE MANAGEMENT

NEW PUBLIC
MANAGEMENT

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 3. NEW PUBLIC MANAGEMENT
THEORY OF PUBLIC CHOICE
2 main ideas
- Public choice is better
than administrative order
- Applying enterprise
management rules

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 3. NEW PUBLIC MANAGEMENT
The failures of government
1. Monopoly in supplying public services
Lacking of competition in public sector
-> Give “market mechanism” to public sector. The
attentions of officers alter from personal benefit to social
welfare
2. Information about organization’s operation
Lacking of publicity and transparency in provision of public
services -> higher cost
Officers work for personal benefit instead of market
demand

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 3. NEW PUBLIC MANAGEMENT
The failures of government
3. Organization’s scale
The more cumbersome in bureaucratic structure of state
agencies, the less efficient in activities

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 3. NEW PUBLIC MANAGEMENT
Solutions of theory of Public Choice
1. Enhance competitiveness in public service market.
2. Promote state agencies to increase publicity and
transparency of information: balance power
3. Divide big-size public agencies into smaller one

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 3. NEW PUBLIC MANAGEMENT
THEORY OF MANAGEMENT
The development of theory of management style

Main idea: applying private management style to public

sector ( the economics, products’ quality…)

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 3. NEW PUBLIC MANAGEMENT

Minimum
Government

Debeaucra
Privatization - tization

Market
orientation Performance
of public measurement
services

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 3. NEW PUBLIC MANAGEMENT
The roots of New Public Management
- Crisis on Puclic Finance
- Impacts of science technology revolution
- Globalization and intergration
- Disadvantages of traditional administration model

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 3. NEW PUBLIC MANAGEMENT
Important changes
- The role of government: from center object to
supporting object
- Government supports for market
- Government is condisered as an enterprise: focus on
the output

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 3. NEW PUBLIC MANAGEMENT
Basic contents of New Public Management
- Socialize public services
- Adjust relationship between Central and local
government
- Decentralize, deregulate in management
- Organize administrative apparatus
- Reform regulations of civil servant
- Enhance participation of citizens in public
administration
- Apply rules and methods in business management to
public management
- Reform public finance
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