The Public Sector Facing the Challenges of Development in the Age of Globalization

Abstract

Economic development is associated with the multidirectional impact of many diverse factors. These are local and regional opportunities, which, in given conditions, may constitute leading factors in shaping development, and diversified macroeconomic market factors and inter-sectoral interconnections in the economy are also of great importance. A special role is played by solutions resulting from connections with the public sector, especially during periods of economic fluctuations and the risk of crisis phenomena. The aim of this paper is to identify the conditions and possibilities of the functioning of public sector entities in the face of changes in the economic situation and the growing complexity of problems that affect development processes in the era of globalization. Economic practice indicates that, in a market economy, it is necessary to create and maintain entities and organizational units in the public sector. The presence of such entities is evident in countries with an established market position, as well as in countries where systemic transformation processes are taking place. It is therefore difficult to deny that state activities aimed at shaping the general directions of public policy and the sphere of public administration, which participate in decision-making processes regarding the shape of the socio-economic system, the directions of economic development and the principles of allocation of public resources. KEYWORDS: public sector, economic development, public finance, public investments