Relative Importance of Public and Private Sectors: The relative importance and size
of public and private sector varies a lot in the developing countries. Countries where
there are severe shortage of skilled human resources usually used to have large public
sectors and state owned enterprises, on the assumption that limited skilled manpower
can be best used by coordinating rather than fragmenting administrative
entrepreneurial activities. The widespread failure of a number of countries with large
public sectors to show any improvement at all, raised questions regarding the validity
of these claims. Economic policies to promote same development objectives would be
different in countries with different compositions of public and private sectors