Introduction

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book is about the economic efficiency of public enterprises; it deals with the analysis of costs, prices and investment. Economic efficiency is not all, of course; technical and managerial efficiency may be more important. The performance of an enterprise may, for example, depend much more on its labour relations than upon its pricing policy. The book is about optimizing; about maximizing or minimizing something or other subject to this or that constraint. Some writers in the field aim for generality. Instead of setting out some abstract formulation of optimal behaviour the aim is to provide some concepts and suggest lines of approach which are applicable in practice. It is even more sensible to ignore it in putting forward elements of analysis which apply not merely to the postal services but to all sorts of public enterprise.