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ESCUELA NACIONAL DE ADMINISTRACIÓN

Y HACIENDA PÚBLICA.
COORDINACIÓN DE IDIOMAS.

WHAT IS PUBLIC ADMINISTRATION?

Public administration is that part of government that is concerned with theexecution of policy. It implements the legislative framework and the spending and taxation decisions that the government has made. It is the channel through which decisions are brought to reality. It isalso the form in which the enterprise sector encounters government in its day to day operations.

A number of activities come under the heading of public administration. Regulation is the way inwhich the state intervenes to ensure:

• the smooth running of markets;

• the prevention of market distortions;

• the quality and availability of critical services.

The regulatedservices can be provided by the private sector as well as the public sector. For instance, the State regulates telecommunications, transport and energy, determining who can enter the market, whatservices they can provide, and what prices they can charge. The State also intervenes when unfair competition is introduced between firms, or when a company by merging with another is likely to have amonopoly or near monopoly position in the market. Clearly the quality of the decision making by the public administration will affect the business immediately in question and the economy as a whole.Decisions have to be good ones. But they also have to be reasonably quick ones: competitive pressures in the modern economy mean that businesses opportunities open up and close off very rapidly.Competition policy is a particularly important part of regulatory activity because it is essential for markets to function freely. The costs to the economy of market dominance by one company can be verygreat. The goods or services in question can be more expensive than is necessary and the range of goods and services can be restricted. Moreover, market dominance may have a tendency to perpetuate...