Government entity – What is it, definition and concept

A government entity is one that provides a public service to citizens. Its management is usually the responsibility of the Government in office, although in some cases it is given a certain autonomy by appointing independent managers at the head of the institution.

That is, a government entity serves the population in different areas such as health, education, etc. Likewise, its administration usually depends on the government in power, unless it enjoys certain independence.

Government entities can provide basic services for citizens, such as sanitation or electricity. However, they can also be in charge of more administrative or economic issues, as is the case with central banks.

That is, within government entities, there is a wide range of organizations with different characteristics.

Characteristics of government entities

Among the characteristics of government entities we can highlight the following:

  • For their operation, they use public funds, that is, the resources that are collected through taxes.
  • Some entities of this type are capable of self-generating income to pay for their activities.
  • In some cases they can have legislative initiative, that is, they can propose laws that will later have to go through the corresponding procedure. For example, it may be that the Parliament has to approve the proposed law, to then be endorsed or promulgated by the Executive Power.
  • These entities are governed by a statute or law created by another or other powers of the State.
  • They are non-profit, that is, they are not created in order to generate a profit or benefit.
  • The professionals in charge of managing the entity may be selected by one or more powers of the State. For example, it may be that, out of seven board members, four are elected by Parliament and three by the Executive Branch.
  • Some of these entities are in charge of being regulators or supervisors, for example, of the stock market, the banking sector or compliance with intellectual property regulations.
  • In principle, their actions must be transparent. In this sense, they must report on how they use the resources received from the State.
  • The fact that these entities are non-profit does not mean that they should not be managed efficiently, since the idea is that the State’s resources are used in the best way. Otherwise, citizens will be harmed by poor quality public services. For this reason, these government institutions should be subject to meeting short- and long-term goals. In addition, measuring your performance is critical.
  • Although it is difficult for these organizations to remain on the sidelines of the political situation, continuity of the projects and public policies carried out by these institutions must be ensured.
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Government Entity Example

An example of a government entity is the Federal Reserve System (FED). This is the body in charge of directing the monetary policy of the United States.

The main objectives of this institution, which must operate independently from the Government, must be maximum employment, price stability (inflation control) and the moderation of long-term interest rates.

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