Introduction
The government has been involved in the business activity of providing certain goods and services in an effort to make the lives of citizens easier. Similarly, the private sector also engages in the same activity, offering some of the goods and services offered by the government, but under different circumstances and having considered certain factors. As a result, there are those that prefer consuming goods and/or services offered by the private sector, while others show a preference for goods and/or services provided by the government. Some of the services and goods offered by the government include healthcare, public schools, public infrastructure, and emergency services among others.
Various arguments have been presented regarding the involvement and role of the government in the economic marketplace with some deeming it necessary on account of factors such as social safety net. However, others are of the opinion that the government has had negative implications with regards to its role in the economic market, such as contributing to the market failure. The involvement or role of government in the economic marketplace is significant owing to some of its benefits and outcomes, as well as there being both advantages and disadvantages of the government offering certain goods and services as opposed to the private sector. The aim of this paper, therefore, is to establish what the advantages and disadvantages of government offering certain goods and/or services as opposed to the same being offered by the private sector. The paper will also justify the government's role in the economic markets place with regards to the social safety net, market failure, and externalities.
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Advantages of Some Goods and Services Being Provided By the Public Sector (Government) Rather Than By the Private Sector
Some of the goods and/or services provided by the public sector are more beneficial than when the same is provided by the private sector. The reason for such an incident is the difference in performance between the public and private sectors in certain areas such as health care. The public sector is deemed as being able to provide care that is both evidence-based and equitable when compared to the private sector. Findings of a study have indicated that the public sector has better patient outcomes, as well as medical standards of practice compared to the private sector.
In the private sector, there is the tendency of practitioners to violate the standards within which medicine is practiced, which also results in poor patients outcomes (Basu, Andrews, Kishore, Panjabi, & Stuckler, 2012). Regarding education, the manner in which the government facilitates the administration of public schools is better than the service provided by the private sector with regards to education. Private schools are more expensive than public schools thus the public sector facilitates the ability of parents to save than the private sector (Lubienski & Lubienski, 2014). Public schools are also guided by certain policies such as no child left behind, which improves the performance of all students, thus outperforming private schools, since they are not competitively driven as well.
Regarding public infrastructure, the government has the ability to provide better infrastructure owing to the fact that it is mandated to ensure the welfare of the public. Due to this, the government conducts extensive research and as a result, establishes quality infrastructure. Also, the government is more dependable to provide durable and high-quality infrastructures in an effort to ensure the welfare of citizens. The public sector, federal, states, and local government respond immediately to disasters such as floods, hurricanes, tornadoes. This is done in an effort to control, offer assistance, as well as facilitate the recovery and rebuilding processes. The same cannot be said about the private sector as it does not demonstrate the same level of preparedness to react to emergencies, thus offer the service.
Disadvantages of Some Goods and Services Being Provided By the Public Sector (Government) Rather Than By the Private Sector
Regarding the health sector, the private sector is deemed better at delivery with regards to healthcare provision, as compared to the public sector. A study’s results revealed that the public sector is less efficient, medically effective, as well as less accountable compared to the private sector. For instance, public hospitals do not show much concern for patients as a result of being overwhelmed, as well as medical practitioners failing to show compassion for reasons such as inadequate compensation (Basu, Andrews, Kishore, Panjabi, & Stuckler, 2012). Also, the study established that the public sector typically does not offer hospitability to health care recipients, which is contrary to the healthcare hospitability in the private sector.
Regarding education, the public sector cannot facilitate small size classes since public schools have more students compared to private schools. This may negatively affect the quality of education offered as teacher and administration cannot give equal attention to all the students. Regarding public infrastructure, there are frequent delays with the release of funding for infrastructure owing to the cumbersome processes of approving projects within the public sector organizations responsible for infrastructure, as well as funding (Bouckaert, Peters, & Verhoest, 2016). Therefore, the delays may have negative implications for the well-being of citizens in the event the needed infrastructure is not there or does not work efficiently. For instance, a delay in the construction or repairs of the trains system cause delays in the public transport sector, which affects the economy as many businesses depend on public transportation services for operations
The Government’s Role in the Economic Marketplace in Terms of the Social Safety Net, Market Failure, And Externalities
The government plays a crucial role in the economic marketplace as it always aims at ensuring the welfare of a country’s citizens. Owing to the increased and central control of the marketplace by the private sector, as well as individuals, it is important for the government to participate in the economic marketplace by safeguarding the social safety net, market failure as well as controlling externalities. The social safety network refers to welfare programs that have been developed in an effort to protect, from hardship and poverty, low-income Americans.
It is the role of the government, within the economic marketplace, to provide the social safety net because it ensures the country’s economy still runs and that low-income Americans do not suffer. This is because the government provides the social security net through universal healthcare, subsidization of public transport, unemployment benefits, homeless shelters, as well as welfare. This is an important role of the government in the economic marketplace since it is a way of preventing certain individuals from falling below a certain poverty line, which has detrimental implications on the economy (Kettle, 2015). The government owing to extensive research conducted by its research institutions has established an elaborate way of ensuring the provision of the social security net, thus its role and significance in the economic marketplace.
Market failure refers to an instance in which there is inefficiency with regards to the provision of goods and services by a free market, which causes loss with regards to net social welfare. A market failure such as externalities, public goods, imperfect information as well as market control may negative implications on the economy. The government, therefore, participates in the subsidization and offering of certain public goods to make them affordable to low-income consumers. The government also plays the role of protecting the welfare of its citizens by intervening in the economic marketplace operations (Stiglitz & Rosengard, 2015). This is done to ensure market failures such as imperfect information do not exist in the market, which may reduce the quality of living for Americans. This is because imperfect information results in instances such as overpriced goods and services.
The government is an important participant in the economic market owing to its ability to intervene in the event of externalities. Externalities refer to the cost or benefits that have an implication on a person who was not willing to incur the cost or benefits. The government is a participant in the economic marketplace to prevent the negative implications of externalities, which have equally negative implications on both Americans and the American economy (Labonte, 2010). Externalities can lead o market failure, which may result in reduced productivity of certain commodities that are vital to the lives of Americans causing a decrease in the quality of their lives. Therefore, the government’s role is similar to that of a ‘checks and balance’ system, which prevents negative implications of business activities in the marketplace that may have negative implications both the economy and the welfare of citizens.
Conclusion
The involvement of government in business and economic activities has benefits as well as disadvantages. The benefits should be maximized on and the disadvantages minimized, which can be achieved through an efficient and effective collaboration between the public sector and the private sector. Also, the government plays a vital role with regards to its participation in the economic marketplace, thus should be supported by well-wishers and nonprofits organizations. The negative implications of government involvement such as market failure from public goods should be addressed to ensure its involvement in the economic marketplace has more benefits.
References
Basu, S., Andrews, J., Kishore, S., Panjabi, R., & Stuckler, D. (2012). Comparative performance of private and public healthcare systems in low-and middle-income countries: a systematic review. PLoS medicine , 9 (6), e1001244.
Bouckaert, G., Peters, B. G., & Verhoest, K. (2016). Coordination of public sector organizations . Basingstoke, UK: Palgrave Macmillan.
Kettl, D. F. (2015). The job of government: Interweaving public functions and private hands. Public Administration Review , 75 (2), 219-229.
Labonte, M. (2010). Size and role of government: economic issues . DIANE Publishing.
Lubienski, C., & Lubienski, S. T. (2014). The public school advantage: Why public schools outperform private schools .
Stiglitz, J. E., & Rosengard, J. K. (2015). Economics of the public sector: Fourth international student edition . WW Norton & Company.
