ABSTRACT
Every advanced society has three sectors: the public sector, the private sector and the third sector of voluntary non-profit organisations. The public sector comprises the general government sector plus all bureaux and agencies, including the central bank. The public enterprises are sometimes placed in the public sector and sometimes in the private sector, if organised as jointstock firms. Principal-agent interaction arises in the public sector as one party, the principal, hires someone or a team of people, the agents, to get something done in exchange for remuneration.
