State and Non-state organizations

• Institutions - made up of established conventions, unwritten rules, or mutual understanding that guide and dictate how political actors should behave and interact with another
• State institution - created to oversee all other state agencies, departments, and offices as well as to perform state functions
• State Institutions - competent of the official state structure and are validated and upheld by central government
• Functions of State Institutions

  1. State Institutions help build confidence by establishing uniform policy and judicial system
  2. The main engines of social and economic advancement in an economy
  3. State Institutions make certain that resources are correctly allocated and that the underprivileged are secured
• Example of State Institutions

  1. DOST (Department of Science and Technology)
  2. DOLE (Department of Labor and Employment)
  3. DOT (Department of Tourism)
  4. DOH (Department of Health)
  5. DTI (Department of Trade and Industry)
• Non-state Institutions - organizations, agencies, and socio-political or cultural forces which offer or provide national and international services and assistance without having to belong to a state or institution
• Non-state Institutions - serve as a link to connect people or states together
• Non-state Institutions include

  • Banks and corporations
  • Cooperatives and Trade Unions
  • Development agencies
  • Transnational advocacy groups
• Two of the most economically influential non-state institution

  1. Banks
  2. Corporations
• Bank - a financial institution that accepts deposits from public and creates credit.
• The origin of the word bank can be traced to

  • German word 'banck'
  • Italian word 'banco' which means "heap of money"
• Banking - accepting for the purposes of lending and investment of deposits of money from the public repayable on demand, order or otherwise and withdrawable by cheque, draft, or otherwise.
• Main functions of Banks:

  1. Accepting deposits - deposits include fixed deposits for time deposits and current or commercial deposits for business
  2. Lending loans - loans are in the form of overdraft, cash, credit, and bills of exchange
• Other Functions of Banks

  1. Merchant banking
  2. Leasing
  3. Mutual funds
  4. Venture capital
  5. ATM
  6. Telebanking or telephone-based costumer service
  7. Credit cards
  8. Locker or deposit box service
• Merchant banking - organizing and underwriting securities for companies and giving advices on various activities
• Leasing - funding of the fixed assets through leasing or the renting out of immovable property of the bank for a specific period
• Mutual funds - mobilizing the savings of the general public and investing them in the stock market and money market
• Venture capital - financial capital provided to early-stage high potential, high rick, growth start-up companies and makes money by owning equities in the companies
• ATM - also known as cash point; providing ATM facilities where costumers can withdraw money easily and quickly 24 hours a day
• Telebanking or telephone-based costumer service - in order to get balance, check status and other account-related information
• Credit cards - allows a certain person to buy goods and services up to a certain limit without immediate payment
• Locker or deposit box service - costumers can deposit their valuables, documents, jewelry, and securities at a fixed point
• World Bank - international financial institution that loans to developing countries from capital programs
• World Banks comprises two institutions

  1. IBRD (The International Bank for Reconstruction and Development)
  2. IDA (International Development Association)
• World Bank - alleviate poverty
• World Bank - created at 1944 Bretton Woods Conference
• Top 5 sectors to which World Bank has committed funding:

  1. Road transport
  2. Social welfare services
  3. Electrical transmission or distribution
  4. Public financial management
  5. Rail Transport
  6. Rural development
• International Monetary Fund (IMF) - bring financial stability to the world following World War II
• IMF - created to prevent economic crises such as Great Depression
• International Monetary F und- primary purpose is to ensure stability of the International monetary system
• International Monetary Fund - oversees the stability of the world's monetary system
• World Bank - reduce poverty by offering assistance to middle-income and low-icnome countries
• Criticisms for the IMF and WB

  1. Influence over Independent Nations
  2. More control by developed countries
  3. Biased decision making
  4. Impact of Development projects
  5. Harm on environment
  6. Focus on only growth
• Multinational Corporations - a company that operates in its home country, as well as in other countries around the world
• Multinational Corporations - maintains a central office located in one country, which coordinates the management of all of its other offices
• Multinational Corporations - maintain actual business operations in other countries and make a foreign direct investment there
• Transnational Corporation - enterprise that is involved with the international production of good or services in more than one country
• Transnational Corporation - sets up factories in developing countries as land and labor are cheaper there
• Transnational Corporation - operate with multiple bases across countries, fostering local responsiveness and flexibility
• MNC Examples

  • Accenture
  • Coca-cola
  • Nike
  • Amazon
  • Apple
  • Microsoft
  • Samsung