As mentioned on the Social Sector page of this website, in a market-system economy, society can be viewed as structured into three broad sectors: 1. Private Sector, 2. Social Sector, and 3. Public Sector. (See next diagram.) Within the framework of a free-enterprise, free-market economy, the enterprise page of this website provided a general overview of how the Private Sector works. The Private Sector is comprised of small and large private businesses spanning the gamut from mom-and-pop stores to multinational corporate conglomerates. The nonprofit page of this website provided a general overview how the Social Sector works. The Social Sector is comprised of an assortment of nonprofit organizations, charities, and foundations. This page gives a general overview of how the Public Sector works, which is more popularly known as the Government Sector.
As illustrated by the next image, from a high-level perspective, the circular-flow model often is used to encapsulate how the market system works. The image illustrates that the government or public sector is a pivotal component of the market system. Further, the national, state, and city organizational charts below represent high-level overviews of how the government sector typically is structured.
The next bloc of graphics brings the Public (Government) Sector into sharper focus. It is fitting to describe the Public Sector as a situation whereby the government taketh and the government giveth. The government receives [taketh] its revenue in the form of taxes and fees. The government distributes [giveth] its revenue in the form of its spending and administrative priorities. The next bloc of graphics gives a general sense of where government revenue comes from and how that revenue is spent.
From a society-wide internal perspective, government exists primarily to foster societal order, stability, civility, and harmony—particularly, the national government—usually in the form of a social contract. The social contract normally comes in the form of a written constitution and concomitant laws, rules, and regulations governing societal behavior.
From a society-wide external perspective, government exists primarily to provide for the common or national defense against foreign aggressors. With the passage of time and from country to country, the scope of government changes. Usually, the role of government expands with the passage of time instead of contracting. For instance, for some countries, a vital secondary role of government might be to foster economic prosperity such as perpetually striving to attain a state of full employment with low inflation. For other countries, a vital secondary role of government might be to preserve conformity to a certain familial, social, or religious order.
Certain products (that is, goods and services) pose payment/collection challenges to providers due to their unique nature. These products are referred to as collective or public goods and services. A good example of a collective good would be protecting the environment and protecting the food supply so that present and future citizens would have clean air to breathe, clean water to drink, and safe food to eat. At the local level, collective goods includes such things as fire protection, law enforcement protection, public parks and recreation, public libraries, public health clinics, and so forth. It is the purview of government to provide—or contract with others to provide—these collective or public products. It is government "policy" that stipulates how these public products are to be provided.
A classic example of the government providing a collective or public product relates to the adverse impacts experienced by those citizens who are directly and adversely impacted by the forces of Nature. Recall the New Orleans levee failures that resulted from Hurricane Katrina. As recounted by wikipedia.org, "On Monday, August 29, 2005, there were over 50 failures of the levees and flood walls protecting New Orleans, Louisiana, and its suburbs following passage of Hurricane Katrina and landfall in Mississippi. The levee and flood wall failures caused flooding in 80% of New Orleans and all of St. Bernard Parish. Tens of billions of gallons of water spilled into vast areas of New Orleans, flooding over 100,000 homes and businesses. Responsibility for the design and construction of the levee system belongs to the United States Army Corps of Engineers; the responsibility of maintenance belongs to the local levee boards."