Forms and Functions

of State and non-state

institutions
STATE INSTITUTION
are institutions supposed to address market failures
and correct imperfections. These market failures exist
when the allocation of goods and services of the tree
market are not efficient and leads to economic loss of
value. This is why some corporations are installed
(charted by special law) to protect the economy and the
public interest of the people. Shown below are the groups
of GOCCs:
1. FINANCIAL INSTITUTIONS
2. PUBLIC UTILITIES, INDUSTRIAL, AREA
DEVELOPMENT, AGRICULTURAL, TRADING,
PROMOTIONAL
3. SOCIAL, CULTURAL, SCIENTIFIC
FINANCIAL INSTITUTIONS
are institutions which the government directly or indirectly own majority of
the capital stock

EXAMPLE
FINANCIAL INSTITUTIONS
PUBLIC UTILITIES, INDUSTRIAL, AREA
DEVELOPMENT, AGRICULTURAL, TRADING,
PROMOTIONAL
EXAMPLE
PUBLIC UTILITIES, INDUSTRIAL, AREA
DEVELOPMENT, AGRICULTURAL, TRADING,
PROMOTIONAL
EXAMPLE
PUBLIC UTILITIES, INDUSTRIAL, AREA
DEVELOPMENT, AGRICULTURAL, TRADING,
PROMOTIONAL
EXAMPLE
SOCIAL, CULTURAL, SCIENTIFIC

EXAMPLE
SOCIAL, CULTURAL, SCIENTIFIC

EXAMPLE
SOCIAL, CULTURAL, SCIENTIFIC

EXAMPLE
The main functions of economic institutions are:

1.Reciprocity
defined as the system of exchange in which
goods or services passed from one individual or
group to another as a gifts without the need for
explicit contracting for specific payments.
TYPES OF RECIPROCITY
A. General Reciprocity- This happens when there is no expectation of
immediate exchange for the given gifts. People are motivated by the sense of
obligations towards the welfare of the others like when parents of a simple family
provide goods and services to the children even though children may not
reciprocate in kind. For example, if you are shopping with a friend and you buy him
a cup of coffee, you may expect him to buy you one in return at some time in the
future.

B. Balance Reciprocity- This happens between persons who lack a sense of

kinship or obligation to help one another with no expectation of return, but who
each has something that the other would like to have. Balanced reciprocity is likely
to occur when a return gift is expected within a relatively short time. Simple barter
or supermarket purchases involve this understanding. If you walk out of a store
without paying for the goods that you have taken, you very likely will be stopped by
the store employees and possibly arrested because you failed to immediately
reciprocate with the appropriate amount of money.
 TYPES OF RECIPROCITY
 

C. Negative Reciprocity

This happens when an individual or group in reciprocal exchange

system attempts to get more than what it gives. Negative Reciprocity may
take place through deceit in bargaining or outright theft because the profit
motive precedes over generosity. For instance, your neighbor may be
offered a new job in a distant city starting in two days. She desperately
needs to sell her car before she leaves. It is nearly new and it costs her
P500,000. You offer her P250,000 which she reluctantly accepts because
there is no other choice. Your taking advantage of her situation resulted in
negative reciprocity.
 
The main functions of economic institutions are:
 
 

2.Redistribution
is when members of an organized group contribute money into a common pol of fund. A central
authority usually has the privilege and responsibility to make decisions about the goods or money later
will be allocated among the group as a whole. Example of this is the taxes that are collected from
individuals dependent on their personal income and then that money is distributed to other members of
society
 
through various government programs.
The
 
main functions of economic institutions are:
 
3.Market Transactions
is when goods are sold for money, which in turn is used to purchase
other goods, with the ultimate goal of acquiring more money and
accumulating more goods. Markets may be represented by physical
locations where transactions are made. These include retail stores and
other similar businesses that sell individual items to wholesale markets
selling goods to other distributors.
Stores may also be virtual. Internet-based stores and auction sites such as
Amazon and eBay are examples of markets where transactions can take
place entirely online and the parties involved never connect physically.
Non-state Institutions
• are groups and organizations which operate outside the
support of any state or government. They are referred to
be ‘stateless’ since they are considered to be independent
of any state, although, they usually collaborate with the
government in implementing projects. Non-state
institutions assume different functions and focus on a
specific objective. In general, they develop certain
services needed by members of the society for their
progress. Examples of which are:
1. Bank
This is a financial institution licensed to receive deposits and make loans.
Banks may also provide financial services such as wealth management, currency
exchange, and safe deposit boxes. There are several different kinds of banks
including retail banks, commercial or corporate banks, and investment banks. In
most countries, banks are regulated by the national government or central bank.
BDO, UnionBank, Chinabank and others are examples of banks in the
Philippines.
 

2.Corporation
This is a legal entity that is separate and distinct from its owners. Corporations enjoy
most of the rights and responsibilities that individuals possess: they can enter contracts,
loan and borrow money, sue and be sued, hire employees, own assets, and pay taxes.
Some refer to it as a "legal person. San Miguel Corporation, ABS-CBN and GMA
Network are some examples of companies in the Philippines.

3.Cooperatives
are people-centered enterprises owned, controlled and run by and for their members to
realize their common economic, social, and cultural needs and aspirations. Multipurpose
Cooperative
  is an example.
 
  
4.Trade Unions
are organizations made up of members (a membership-based
organization) and its membership must be made up mainly of workers.
One of a trade union's main aims is to protect and advance the interests
of its members in the workplace. Example of these are Federation of Free
Workers (FFW), Kilusang Mayo Uno (KMU), Sentro ng mga Nagkakaisa
at Progresibong Manggagawa (SENTRO), and the Trade Union Congress
of
  the Philippines (TUCP).
 
5. Transnational Advocacy
Transnational advocacy organizations (TAOs) are defined as “self-
organized advocacy groups undertaking voluntary actions across state
borders in pursuit of what they deem the wider public interest.” Advocacy
organizations are known by different names: non-state actors, NGOs,
transnational advocacy networks. Example of this is the Greenpeace, an
independent global campaigning organization that acts to change
attitudes and behavior, to protect and conserve the environment, and to
promote
  peace.
   
6.Development Agencies
Its main duty is to discover regional potential and develop cooperation between the
public sector, private sector and civil society. United
States Agency for International Development (USAID) the Inter-American
Foundation(IAF), and the Millennium Challenge Corporation (MCC) African Development
Foundation
  (ADF) are some examples.

7.International Organization
An international organization (intergovernmental organization) is an organization
established by a treaty or other instrument governed by international law and possessing
its own international legal personality, such as the United Nations, the World Health
Organization and NATO.