A mixed economy is one in which there is a presence of both public and private sectors. While government agencies have a role in developing the financial system in this environment, so too does private enterprise, which includes businesses that may be owned by public investors. Primary characteristics of a mixed economy tend to include traces of capitalism, which encourages businesses to create their own wealth, in addition to socialism. With socialism, the government has control over the amount of resources that are distributed and the manner in which those funds and efforts are directed.
Some of the most developed countries in the world operate under a mixed-economy system. These regions still may face challenges in creating and maintaining opportunities, and it may be difficult to strike the ideal balance between government and private control. Nonetheless, economically advanced places have achieved some of the greatest breakthroughs that the world uses across many industries.
Other nations that are seeking to expand out of rural conditions might seek to create an environment where there are characteristics of a mixed economy. It can be especially overwhelming for a country that has relied largely on either the public sector or private businesses to integrate the traits of a mixed economy. A nation that has failed to grow a financial system adequately through a series of different approaches may determine that both federal and corporate involvement is needed in order for business and citizens to flourish as desired.
Another of the characteristics of a mixed economy is the government being heavily involved with infrastructure development in a region. This could include the construction of public schools, highways, and local roads. A government is likely to use proceeds from the taxes charged to a country's citizens in order to finance such development. When public agency budgets become especially strained, however, the improvement of a nation's infrastructure could become delayed.
The investment of private capital into a country's roadway and building development could support the continuation of construction projects, and is included among the characteristics of a mixed economy. It is often large, institutional investors that become involved in funding building projects in a region because of the high costs associated with these projects. The participation of both public and private sectors in economic development leads to a greater probability for the creation of jobs and expansion. In a country that is still developing, the involvement of private business can also advance the integration of health-related initiatives, including water purification and medical procedures, for instance.