Public administration v. Private administration

Public Administration v. Private Administration

This is one of the long standing debates in the study of public administration. In this debate, there are equal numbers of proponents on both sides of the argument. There are proponents who argue that there is nothing public about public administration and at the same, a group of theorists argue that there is publicness in public administration.

S. No.	Public Administration v. Private Administration
	Similarities- Fayol, Gulick, Urwick, Boseman, March, Thompson etc.
	Conventional Arguments
1.	It is argued that organization across the sectors employ same tools and techniques to manage the affairs within the organization. Thereby, whether it is public administration or private administration, it employs techniques such as planning, co-ordinating, commanding etc.
2.	Unlike the popular belief, the tools and techniques in public sector are employed to advance social concerns and in private sector, it is believed that tools and techniques are advanced to generate profit. But, there are many private organizations as well which are directed towards social responsibility and social causes. At the same, there are many government organizations whose activities are directed towards earning profit. Thus, this argument is unsustainable.
3.	Today, the government as well as the private sector, both are involved in providing similar type of activities. For e.g. health services, infrastructure etc. are being provided by both the government and the private sector.
	Non-Conventional Arguments
A.	It is argued by few that the process of nationalization and privatization justifies the similarity between the public administration and the private administration. Had the public administration and the private administration been different from each other, it would not have been possible to nationalize and privatize the sector.
B.	If we consider some of the contingency or situational studies, we will find that the difference between the two sectors is very less as compared to their resemblance with each other. Hash & Hall and Pugh, Hickson and Hinning have conducted studies in this regard. There studies had similar findings. Hash and Hall considered a large number of organizations from the public sector as well as the private sector. They considered the organizations operating in different functional areas. They found out that the organizations within a particular sector are not necessarily similar on account of their structure, processes or function rather organizations across the sector operating in the same functional area resemble each other. They concluded that public administration and private administration are more similar in nature rather than being different from each other.
	Contemporary Theorists- Cooper, Kettle, Walmsley, Zald They have emphasized on the emergence of the contemporary organizations such as mixed or hybrid organization to highlight the similarities between the public administration and private administration. Paradigm developed by Walmsley & Zald It is two-dimensional in character involving ownership and funding. Based on these two dimensions, they have developed four types of organizations. Funding refers to the source of revenue. Ownership refers to the stake. Public Ownership- Stake of government more than 50% Private Ownership- Stake of private entity is more than 50% Public Funding- Source of revenue is public budget I II - They carry both private as well as public character. Hence, they are being referred to as hybrid of mixed organizations. (Privately Owned but publically funded) Private Funding- Source of revenue is sales and donations III - They carry both private as well as public character. Hence, they are being referred to as hybrid of mixed organizations. (PSUs) IV
	Differences
	Conventional Arguments
1.	Public administration is generally considered to be welfare oriented.	Private administration is considered to be profit oriented.
2.	Public administration is referred to as Common Weal Organization.	Private administration is being referred to as Business organization.
3.	Public administration operates under the political direction.	Private administration does not operate under the same type of political consideration.
4.	Consistency of the treatment- Public administration is non-discriminatory while dealing with the citizens. Thereby, it is consistent in its treatment.	Private administration can go for a discriminatory based on its commercial or business requirements.
5.	Monopoly- It is a type of formal arrangement whereby a particular is allowed to operate while the other sector is restricted. The public sector can enjoy monopoly in a particular sector and private sector won’t be permitted in those sectors.	The private sector cannot be allowed to have monopoly.
6.	Public Scrutiny will be higher in case of the Public sector. It is subject to multiple institutional mechanisms of scrutiny.	The same type of scrutiny is not applicable to the private sector.
7.	Diversity of activity- Public sector is more diverse in terms of presence and operation in functional areas.	Private sector is not as diverse as the Public Sector.
8.	Legal Constraints- Public sector is considered to be more rigid in its operations because it is subject to multiple legal constraints. Public sector has to abide by a number of rules, laws, organizational manuals etc.	Private Sector is not subject to as many legal constraints as there are in the public sector. Private sector enjoys an amount of flexibility which is not present in the public sector.
	Non-Conventional Arguments
A.	Dahl & Lindbloom- political economies operate through market economy and political polyarchy. Management of a market economy is based on the principle of demand and supply which primarily promotes individual’s choice and volition. This mechanism operates through volunteerism. It is a very appropriate mechanism since it does not use coercion or force. Though this is a very appropriate mechanism in managing political economies but everything in the political economies cannot be managed through these mechanisms. There are three important areas of limitation. a.       Public good and the problem of free riders- The market operated through the imposition of user fee. In market, the various goods and services that are provided are charged. In the context of certain goods and services which are classified as public goods (goods which are consumed by the public at large). The traditional imposition of user fee is not possible in the case of public good. In this type of situation, the sense of personal benefit goes down and the tendency to escape the responsibility goes up. This gives rise to the problem of free riders. Free riders are those who are ready to consume the goods but try to escape the responsibility of paying for it. This problem can be solved by persuasion and use of coercion. Only the public sector has the legitimacy to use coercion. b.      Individual Incompetence- It is believed that an individual in a marketplace is a rational man. Thereby, the man always strives to attain the best and does not get satisfied with the second best. Being a rational man, the individual tries to maximize his own utility. The individual in the market is considered to be fully informed. This presumption is challengeable. In a marketplace, the individuals suffer from a number of incompetencies. The market increases these incompetencies and maximizes upon these incompetencies. c.       Externalities and Spill over- Spill over refers to an impact outside of a core activity which is not intended. This problem will not be handled by the private sector because it will involve financial investments. It is the public sector which will take note of the spill over.
B.	Moore- He has discussed the difference between the public administration and private administration based on the concept of ‘Public Value’. Public Value refers to various public goods and services. Public Value is being provided by both the public sector and the private sector. Moore says that public sector provides the Public Value at a cost which is equal to or even less than the cost of production. On the other hand, the private sector provides the goods and services at a cost which is more than the cost of production. Thereby, for public sector, Public Value is an end in itself and for the private sector; Public Value is merely a means to achieve an end.
C.	Benn & Gaus- They have tried to bring about the difference between public administration and private administration based on the publicness of public administration and privateness of private administration. There are three criterions in this regard. a.       Interest- It refers to ‘whose interest is at stake’ i.e. if the profit or the loss of an organization affects the interest of a single individual or a group of individuals, it explains the privateness of an organization. On the other hand, if it affects the people at large, it explains the publicness of an organization. b.      Access- It refers to ‘whom the access or facilities of an organization is open. If the access is open to an individual or a group of individuals, it explains the privateness of the organization. On the other hand, if the access to the facilities is open to people or public at large, it explains the publicness of the organization. c.       Agency- It refers to ‘who owns the organization’. If the organization is owned by an individual or a group of individual, it explains the privateness of the organization. On the other hand, if it is owned by the public at large, it explains the publicness of the organization. This publicness or privateness explains the character of private sector as distinguished from the public sector.
	Overall Debate- One has to concede that there a number of areas of similarity between the public administration and the private administration and at the same time, there are differences as well. The difference between public administration and private administration is not of kind but of degree.