What Is the Difference Between the Public Sector and the Private Sector?

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The public sector consists of organizations that are owned and operated by the government, while the private sector consists of organizations that are privately owned and that do not form part of the government. The public sector includes organizations run by federal, state and municipal government bodies.

Public sector organizations often provide vital services at affordable prices. They include schools, health care facilities and police stations. Anyone paid directly by the government for their work, for example, post office workers, IRS employees and members of the FBI, is also part of the public sector. The private sector includes a variety of corporations and small businesses, like retail stores, restaurants and credit unions.