Editing State monopoly (section)

== Purpose of state monopolies ==
The theoretical purpose of state monopolies is to maximise collective [[welfare spending|welfare]]. This is based on the idea that public administrations are not strictly aimed at profit-making. Products or services therefore can be guaranteed to consumers of that supply of that product or service under the best conditions and at prices that are comparable to the expectations of the value and characteristics of the product or service.<ref name=":02">{{Citation |last1=Scognamiglio |first1=Carlo |title=Public Monopolies |date=1992 |url=https://doi.org/10.1007/978-1-349-12818-1_9 |work=Oligopoly and Dynamic Competition: Firm, Market and Economic System |pages=249–278 |editor-last=Baldassarri |editor-first=Mario |access-date=2023-04-22 |place=London |publisher=Palgrave Macmillan UK |language=en |doi=10.1007/978-1-349-12818-1_9 |isbn=978-1-349-12818-1 |last2=Caroli |first2=Matteo|url-access=subscription }}</ref>

However, the structure of a country's economy more broadly usually determines how state monopolies operate. In countries that are members of the [[OECD]], sectors where there are state monopolies are usually those that are meeting the "needs of utilities and public services."<ref>{{Cite journal |last=Machmud |first=Aris |date=September 2022 |title=Monopoly Analysis of a Limited Liability of State-Owned Enterprises (SOEs) |journal=Jurnal Penegakan Hukum Dan Keadilan |volume=3 |issue=2 |pages=152–168|doi=10.18196/jphk.v3i2.15825 |s2cid=253294152 |doi-access=free }}</ref> Whereas, in [[Developing country|developing economies]], state monopolies can disrupt healthy business competition, and in [[Planned economy|centrally controlled economies]], such stifling of private competition plateaus economic growth.

The concept of public goods, as produced and distributed under state monopolies, are that they are supplied at a level independent from, or inconsistent with, the actual market demand for the good. Therefore, the price does not reflect the utility of the product or service. Under [[Marxism|Marxist]] economic ideology, this advocates for a centralised production system to account for the fact this product or service should be universally available and competition 'badly adapts,' to the constraints to which the supply of these products or services are subject.<ref name=":02">{{Citation |last1=Scognamiglio |first1=Carlo |title=Public Monopolies |date=1992 |url=https://doi.org/10.1007/978-1-349-12818-1_9 |work=Oligopoly and Dynamic Competition: Firm, Market and Economic System |pages=249–278 |editor-last=Baldassarri |editor-first=Mario |access-date=2023-04-22 |place=London |publisher=Palgrave Macmillan UK |language=en |doi=10.1007/978-1-349-12818-1_9 |isbn=978-1-349-12818-1 |last2=Caroli |first2=Matteo|url-access=subscription }}</ref>

Interestingly, a 2013 study found that when private options for products or services are available, welfare is more likely to be maximised.<ref>{{Cite journal |last1=Seim |first1=Katja |last2=Waldfogel |first2=Joel |date=April 2013 |title=Public Monopoly and Economic Efficiency |journal=American Economic Review |volume=103 |issue=2 |pages=831–862|doi=10.1257/aer.103.2.831 |s2cid=53691574 |url=https://repository.upenn.edu/marketing_papers/418 }}</ref> The simple rationalisation to this is that when there are more players, there is therefore more choice. More choice allows greater access to a greater number of people.