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Questions and Answers
What type of public institution is the EU an example of?
What type of public institution is the EU an example of?
- Private Institution
- Specialised PI
- Territorial PI (correct)
- Nonprofit Organisation
What is one of the main objectives of public institutions?
What is one of the main objectives of public institutions?
- Increasing sales prices
- Eliminating all competition
- Providing economic infrastructure (correct)
- Maximizing profit
What do governments primarily provide?
What do governments primarily provide?
Collective goods and services
Public institutions operate as a single, undifferentiated body.
Public institutions operate as a single, undifferentiated body.
Which is NOT a main instrument of government activities?
Which is NOT a main instrument of government activities?
What is an example of a collective good?
What is an example of a collective good?
Public institutions are characterized by the absence of a ______ for products or services.
Public institutions are characterized by the absence of a ______ for products or services.
What effect does the absence of a sale price have on the quality of management in public institutions?
What effect does the absence of a sale price have on the quality of management in public institutions?
Match the following government activities with their descriptions:
Match the following government activities with their descriptions:
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Study Notes
Public Institutions
- 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.
Government Roles
- 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
Government Activities
- 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.
Distinctive Characteristics of Public Institutions
- 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.
Heterogeneity of Services/Products
- Significant variety in activities, expertise, and organizational structures impacts public management systems.
- Despite heterogeneity, public institutions are often treated as a unified entity.
Absence of Price
- 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.
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