In modern democracies, public service is often performed by employees known as civil servants who are hired by elected officials. Government agencies are not profit-oriented and their employees are motivated very differently. Studies of their work have found contrasting results including both higher levels of effort and fewer hours of work. A survey in the UK found that private sector hiring managers do not credit government experience as much as private sector experience. Public workers tend to make less in wages when adjusting for education, although that difference is reduced when benefits and hours are included. Public workers have other intangible benefits such as increased job security and high wages.
A public service may sometimes have the characteristics of a public good, but most are services which may be under-provided by the market. In most cases public services are services, i.e. they do not involve manufacturing of goods. They may be provided by local or national monopolies, especially in sectors which are natural monopolies. They may involve outputs that are hard to attribute to specific individual effort or hard to measure in terms of key characteristics such as quality. They often require high levels of training and education. They may attract people with a public service ethos who wish to give something to the wider public or community through their work.
Governing bodies have long provided core public services. The tradition of keeping citizens secure through organized military defence dates to at least four thousand years ago. Maintaining order through local delegated authority originated at least as early as the Warring States period in ancient China with the institution of xian under the control of a centrally-appointed prefect. Historical evidence of state provision of dispute resolution through a legal/justice system goes back at least as far as ancient Egypt. A primary public service in ancient history involved ensuring the general favor of the gods through a theologically and ceremonially correct state religion. The widespread provision of public utilities as public services in developed countries usually began in the late nineteenth century, often with the municipal development of gas and water services. Later, governments began to provide other services such as electricity and healthcare. In most developed countries local or national governments continue to provide such services, the biggest exceptions being the U.S. and the UK, where private provision is arguably proportionally more significant. Nonetheless, such privately provided public services are often strongly regulated, for example by Public Utility Commissions. In developing countries public services tend to be much less well developed. For example, water services might only be available to the wealthymiddle class. For political reasons the service is often subsidized, which reduces the finance potentially available for expansion to poorer communities.
Nationalization and privatization
Nationalization took off following the World Wars of the first half of the twentieth century. In parts of Europe, central planning was implemented in the belief that it would make production more efficient. Many public services, especially electricity, fossil fuels and public transport are products of this era. Following the Second World War, many countries also began to implement universal health care and expanded education under the funding and guidance of the state.
There are several ways to privatize public services. A free-market corporation may be established and sold to private investors, relinquishing government control altogether. Thus it becomes a private service. Another option, used in the Nordic countries, is to establish a corporation, but keep ownership or voting power essentially in the hands of the government. For example, the Finnish state owned 49% of Kemira until 2007, the rest being owned by private investors. A 49% share did not make it a "government enterprise", but it meant that all other investors together would have to oppose the state's opinion in order to overturn the state's decisions in the shareholder's meeting. Regulated corporation can also acquire permits on the agreement that they fulfill certain public service duties. When a private corporation runs a natural monopoly, then the corporation is typically heavily regulated, to prevent abuse of monopoly power. Lastly, the government can buy the service on the free market. In many countries, medication is provided in this manner: the government reimburses part of the price of the medication. Also, bus traffic, electricity, healthcare and waste management are privatized in this way. One recent innovation, used in the UK increasingly as well as Australia and Canada is public-private partnerships. This involves giving a long lease to private consortia in return for partly funding infrastructure.