PARASTATAL

A 'parastatal' or 'para-statal' (from para- meaning mean something close or near, a prefix, and state) is a fully or partially state-owned corporation or government agency. In centrally planned economies such entities are dominant. They play a major role in many LDC's, even if free-market economy is declared. Often the influence of these entities is very large, matching that of the government itself. They are created to give certain social welfare services as well as commercial services. Para-statals comprise a large part of the national bureaucracy of certain nations.
These state-owned enterprises fall in between true public services and the private sector in terms of government involvement. Para-statals have their own board of directors, similar to private corporations. The government, however, has authority to control the board of directors.
Para-statals are formed where a political body would not operate as efficiently as civilian ownership can. The government in this situation willingly gives up power to private business - but not fully. Examples of para-statals are waterworks, hydroelectric power, ports, and some petroleum sectors.
The role of para-statals is explicit in countries like Nigeria and Tanzania. Even in developed countries, large utility companies have characteristics of para-statals, such as EDF and GDF and other national utilities in France.

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★ Quango