Parastatal is a category that includes any institution, body, company, agency or group that collaborates with the State. However, this is not part of the Public Administration.

To explain it in another way, the entity that pursues public objectives, but does not formally belong to the state agencies, is called parastatal, having a certain degree of autonomy.

In this sense, it is important to point out that the Public Administration is constituted by the entities of the public sector formed to administer and manage organisms and institutions of the State.

Thus, unlike the Public Administration bodies, those parastatals have their own legal personality that is not the same as that of the State.

It should be noted that groups that act outside the State, but respond to the interests of the State, are also known as parastatals. For example, exerting repression on subversive groups or, in general, on the population.

This type of parastatal forces have existed in countries where, for example, terrorist groups antagonistic to the State have been formed.

Parastatal armed groups often carry out actions that are outside the law, such as human rights violations. Said acts are carried out clandestinely, contrary to the rule of law.

Characteristics of parastatal organizations

The main characteristics of parastatal organizations are the following:

  • Although they are not part of the Public Administration, their functions respond to the public interest. This, unlike private institutions that follow particular objectives; like profit in the case of companies.
  • They have greater autonomy than the centralized bodies of the Public Administration. In that sense, they have their own heritage, for example.
  • They are created at the initiative of the Government, by decree or law.
  • They respond to the Government, collaborating with it to achieve certain objectives. For example, of an economic or social nature; such as greater financial inclusion or the granting of low-cost credit to people with lower incomes.
  • This type of institution would have the advantage of a greater degree of autonomy in management, independent of political power, which would allow greater efficiency.

Example of a parastatal institution

An example of a parastatal institution is the Mexican Mint.

This entity is the one in charge of manufacturing the legal tender coins in the Aztec country. Thus, although it is dependent on the Government, the Ministry of Finance and Public Credit (SHCP), it is a decentralized body.

The Mint was created in 1535 and is the oldest in America.

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