This causes a dilemma for the state to reduce its own activities and on the other hand to face an ever-increasing public demand for services. Management requirements are needed as well to support service provision. A strategic analysis is needed to clarify what constitutes public services, who are their providers, their purchasers, and the end-users. Some argue that the state should loose its monopolies on not-well functioning social services, while others want to protect the institutions. Production, provision, and delivery are the three basic functions of public services.
Many innovations are related to the production and delivery of the public service.
The service provision can be viewed in the context of the scope of government and how they drive policy decisions to privatize services. The nature of goods and services Criteria have to be established to determine the nature of goods and services. The state in developing countries, which struggle with structural adjustment, tends to provide private goods, while public goods go unprovided. The innovations call for adaptive 'reinvention' of institutional arrangements, and organizational design. In public management, managerial improvement doesn't always lead to service improvement.