How Economic Decisions Are Made in Public vs. Private Sectors

Abstract

This article describes how economic decisions are made differ from the public and private sectors. Both cater their decisions to the needs of the public but the context and the purpose behind the decisions differ. The primary purpose of article is to evaluate and compare the most common and effective methods of decision making used in private or public sectors. This article used a traditional systematic review of current literature in the field in order to perform the purpose of the study. It was found that although both sectors will make similar decisions, the sectors would utilize different methods to achieve economic decisions, primarily because both are affected by diverse factors. While private sector decisions may be hindered by government regulation, the public-sector faces challenges with financing a project and politics. This paper concludes that all the methods the private and public sectors utilize, including those in common, are viewed differently, and therefore their economic decision-making is not one in the same. Therefore, the method used to make the decision is dependent on the context of the decisions being made and also several other factors (operational, culture, regulatory) that depend on the type of sector (public or private).