1.2.1—Private and public sectors

The private sector is owned and controlled by private individuals or organisations; the public sector is owned or controlled by the state. The distinction is about ownership and accountability, not simply whether a service charges money.

Private organisations usually raise finance and answer to owners or investors, while public organisations are accountable through public authorities and use public budgets or mandates. Both sectors can provide goods or services, and either can face efficiency, access or quality trade-offs.

Classify an organisation by asking who owns it, who controls major decisions, where its finance comes from and to whom it must report. Do not infer the sector from the product alone.

A city bus operator funded and overseen by a municipal authority is public-sector even if passengers pay fares. A privately owned ride-hailing firm is private-sector even if it receives a government contract. The contract changes revenue, not ownership.

Public does not automatically mean free or inefficient, and private does not automatically mean profit-maximising in every choice. Explain the ownership and accountability evidence before judging performance.