Reducing environmental failures of public sector

In many countries, the public sector owns the most polluting industries and controls important natural resources. The public sector tends to follow environmental criteria less well, be less efficient, uses more resources, and creates more waste than the private sector. One of the main reasons for this difference is that the public sector can have great difficulties in self-regulation. The public sector is in essence governed by itself, the government, or in other words is both "the poacher and the gamekeeper". There is agreement that there needs to be greater separation between the regulator and the regulated by greater privatization of the public sector or by establishing autonomous regulatory bodies to regulate the public sector.

The environmental problems of eastern Europe and the former Soviet Union demonstrate the environmental degradation as a result of public sector shortcomings.