Chapter 1 The role of the public sector
Full access

The first chapter sets the stage for the book. It explains the book's approach on how to understand and analyse the public sector economy, while at the same time provides an overview of the book's chapters that may help the reader to understand the logic and context of the book. This includes as a central issue to constantly be aware that economics is about scarcity of resources, and the need to prioritize what should be produced, how to do it and by whom. Even in rich countries there is insufficient money available to fulfil all the wishes of citizens, interest groups and politicians wanting to be re-elected. Money spent on one issue can't be spent on another issue and thereby a conflict will arise between different needs. Money is, at the end of the day, often the means necessary to achieve the ends, and naturally is not an aim in itself. This also implies that it is constantly important to think about how to most effectively use resources. If used more effectively, this will open the way for either lower taxes and duties and/or higher spending in other areas.