The institutional framework for the public sector of economy at the current stage of its development

Abstract

Subject. The basic components and the structure of the public sector of economy and its functioning in the current context are subjects of applied research of many international and Russian scientists. However, the majority of significant aspects of the institutional framework for the public sector, the classification of types and forms of state institutions in theoretical economics have not been studied enough and have been debated a lot in scientific literature. One of the most controversial issues in economics is the rationality of the formation of an institutional framework for the public sector. Therefore, the study of issues related to the functioning of the public sector and its development as the main state institution is objectively important for the formation of prerequisites for the sustainable economic and social development.
Objectives. The purpose of the research is to study the institutional system of the public sector within the national economy and to consider its basic structural elements and its functioning aimed at improving the public welfare. The article presents a classification of public institutions by hierarchical structures and their main functional features, i.e. public administration, public enterprise, and public social services.
Methods. The research was conducted with a help of a set of scientific methods and research techniques: dialectical logic, the cognition of objective reality, scientific abstraction and analysis. Also, an institutional and systemic approaches to the “public sector” category were used. The study involved an assessment of relevant scientific publications in theoretical economics.
Conclusions. The conclusion was made about the leading role of public institutions in the social and economic system of the national economy. The public sector institution has a dual nature, since it is both a subject and an object of public administration. It was found that as a subject of administration the public sector acts as the main regulator of social and economic relations in the national economy, and as an object of administration it functions as an economic entity that performs a variety of functions and carries out its activities in accordance with state standards. It is advisable to classify the institutional framework for the public sector of the economy by the types of state activities, which characterise its horizontal structure, i.e. public administration, public enterprise, and public social services. Such structure is also classified by a hierarchic feature and makes up a vertical structure of state institutions: public institutions of a higher, middle, and lower levels. The activities of the public sector institutions are subordinate to the achievement of the established state goals, which take into account public interests and are aimed at the sustainable development of the social and economic system of the national economy.