Public and Private

What are the Basic Differences?

Public/Private
• In this segment we look at the underlying
differences between the two sectors that
should be common to all developed
democracies.
• So this is a common base before we start to
look at differences specific to any national
factors.
1. Simplified model of the Private Sector
2. Simplified model of the Public Sector
Differences Between the Public and Private Sectors

• The time horizon: Public sector horizon is

shorter
• Duration of Service: Public managers have
shorter lifespan
• Measurement of Performance
• Personnel Constraints: Rigidity in Public
Sector
• Equity and Efficiency: Government’s
concern with equity
(cont)
• Public process versus Private: Actions of
government more open to scrutiny
• Press and the Media: Public sector
"hounded" by the media?
• Persuasion and Direction: Public managers
have to build consensus outside and inside
Cont.
• their departments; private sector more
hierarchical
• Legislative oversight: Pervasive in the
Public Sector
• The Bottom Line: What is it in the Public
Sector?
Quote…
• Quote…
• "Public organizations tend to have goals that are difficult
to quantify, meaning that it is difficult to measure
outcomes. The purpose of a public organization is to
provide something in a ‘good way,’ in a ‘proper way,’ or in
an ‘efficient way.’ but what is meant by these objectives?
There is simply no uniform currency available that may be
used to evaluate the objectives. Whereas, there is such a
goal (profit) and such a measure (money) in private
organizations, there is nothing similar in public
organizations.’
• Jan-Erik Lane, in Kooiman and Eliassen’s Managing Public
Organizations, p.51.
Another quote from same source.
• "The difference between private and public
management is not that one type of orghanization
pursues one, and the other several goals, but that
there is a difficulty with the objectives of public
organization, their lack of quantifiable measures
—their qualitative nature. This makes it extremely
diffficult to evaluate the benefits from the public
provision of good and services other than simply
referring to the costs of the activities. Leadership
requires other sources of legitimation than a
reference to the costs incurred, but how the
demand for the public provision of goods and
services to revealed in a rational way?"
• Dean Allison’s Conclusions:
• While the need for increased government
efficiency is real, the notion that there is any
significant body of private management practices
and skills that can be transferred directly to the
public sector…is wrong.
• While performance in public management can be
improved substantially, an improvement will not
come from massive borrowings of private sector
skills and understandings.
• The effort to develop public management as a field
of knowledge should start from the problems
faced by practicing public managers.