Public Institutions and Government Roles

Study Notes

Public institutions are granted superior powers to promote and protect community interests.
They are divided into territorial (like EU, national governments, regions, municipalities) and specialized (like research institutes, health institutions, foundations).
Public institutions are a system of autonomous bodies with unique histories, competencies, and improved through individual institution enhancements.

Providing economic infrastructure: institutions, rules, and arrangements for economic activity
Delivering collective goods and services: non-excludable and indivisible goods like public parks or clean air
Resolving conflicts: mediating disagreements between diverse interest groups
Maintaining competition: preventing monopolies and ensuring fair market access
Protecting natural resources: mitigating environmental harm for current and future generations
Guaranteeing minimum access to goods and services: addressing poverty and unemployment
Stabilizing the economy: managing monetary policies, wages, taxes, and prices

Provision: Government provides goods and services through its budget.
Subsidies: Government supports companies to provide specific goods or services.
Production: Government produces and sells goods and services in the market.
Regulation: Government uses its authority to allow or prohibit activities in the private economy.

Heterogeneity: Public institutions provide diverse services and products, requiring varied expertise, organizational models, and management systems.
Absence of a Sale Price: Public services are often provided free or at a cost lower than production, with social considerations influencing pricing.
Formalization: Administrative activities are highly structured and documented.
Political-Institutional Cycles vs. Management Timelines: Political decisions influence public institution operations, creating different timeframes than purely managerial ones.
Announcement Effect: Public institutions' actions have a significant impact on public perceptions and behavior, even before implementation.

Significant variety in activities, expertise, and organizational structures impacts public management systems.
Despite heterogeneity, public institutions are often treated as a unified entity.

Financial balance does not reflect management quality: well-managed institutions can be in deficit, poorly managed institutions can be balanced due to funding.
Lack of a direct price makes comparing public value with cost challenging.