Forms and Functions of State and Non-

state Institution

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State
At the time of the initial development of the modern human rights system, States were the
dominant actors in the international arena.
A state is an organized political community acting under a government and united by
common set of laws. It uses absolute power in directing the path of a society. It also uses complete
political coerciveness, which may come in the form of armed forces personnel, stricter laws, and
rigid government policies in order to attain its societal goals and objectives.
Market exchange is the primary form of economic subsistence of a state wherein
standardized currencies are being used to exchange commodities.
States differ in sovereignty, governance, geography, and interests. It may be classified as
sovereign if they are not dependent on, or subject to, any other power or state. Other states are
subject to external sovereignty where ultimate sovereignty lies another state.
The concept of the state is different from the concept of government. A government is the
particular group of people that controls the state at a given time. In other words, governments are
the means through which the state power us employed like applying the rule of law.
The concept of the state is also different from the concept of a nation, which refers to a large
geographical area and the people therein who perceives themselves as having a common identity.
The state is a political geopolitical entity; the nation is a cultural or ethnic entity.
As a state, it consists of actors with varying interests and assertions, social rules are
implemented in the forms of laws. These laws are created to manage the interaction among
individuals and between the individuals and the state. As a citizen of a country, an individual is
subjected to the legal norms in the territory. These norms may include paying taxes, rendering
military services, and contributing to the political life in the society.
The State intends to be a strong actor in the performance of the three important political
functions. The state, in full form,
1. maintains control over violence in its domain
2. allocates resources and rewards at its discretion, and
3. stands as the major focus of identity for the large majority of the people under its
authority.

Elements of the States

1. Population
It is the people who make the state. Population is essential for the state. Without
population there can be no State.

2. Territory
There can be no state without a fixed territory. People need territory to live and organize
themselves socially and politically. It may be remembered that the territory of the states
includes land, water and airspace.

3. Government
It is the organization or machinery or agency of the State which makes, implements,
enforces, and adjudicates the laws of the state.

4. Sovereignty
It is the most exclusive elements of State. Without sovereignty no state can exist. State
has the exclusive title and prerogative to exercise supreme power over all its people and
territory. It is the basis which the State regulates all aspects of the life of the people living
in its territory.

Forms of States
States come in a variety of forms that vary on who holds power, how positions of leadership
are obtained, and how authority is maintained. These are:

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 a. Authoritarian Government
Authoritarian governments differ in who holds power and in how control they
assume over those who govern. An example of this type is Monarchy.
Monarchy is a form of government in which supreme power is
absolutely lodged with an individual, who is the head of the state, often for life or until
abdication. The person who heads a monarchy is called a monarch. Some monarchs hold
unlimited political powers while many constitutional monarchies, such as the United
Kingdom and Thailand. Currently, 44 nations in the world have monarchs as head of
state.
Totalitarianism is a political system that strives to regulate nearly every aspect of
public and private life. It theoretically permits no individual freedom and that seeks to
subordinate all aspects of individual life to the authority of the state. Modern examples of
totalitarian states include the Soviet Union under Joseph Stalin, Nazi Germany under
Adolf Hitler, the People’s Republic of China under Mao Zedong, and North Korea under
the Kim Dynasty.

b. Oligarchic Government
An oligarchy is a form of government in which power effectively rests with a small-elite
segment of society distinguished by royalty, wealth, family, military, or religious
hegemony. An oligarchy does not have one clear ruler, but several powerful people who
rule. One common example is theocracy.
Theocracy is a government by divine guidance or by official who are regarded as
divinely guided. Leaders are members of the clergy, and the state’s legal system is based
on religious law. Contemporary examples of theocracies include Saudi Arabia, Iran, and
the Vatican.

c. Democratic Government
Democracy is a form of government in which the right to governs is held by the
majority of citizens within a country or a state. The two
principles of democracy are that all citizens have equal access to power and that all
citizens enjoy universally recognized freedoms and liberties. People can either become
country leaders through electoral
process or elect leaders who represent the core values and beliefs. There are 99
democratic nations globally. Examples of democratic nations are Philippines, Norway,
New Zealand, United States of America, Canada, Columbia, Italy, and South Africa.

Roles of the States

1. State provides security against external aggressions and war. For this purpose, the state
maintains an army.
2. State ensures security against internal disturbances disorders and crimes. For this purpose,
the state maintains police.
3. State legally grants and guarantees the rights of the people.
4. The state issues and regulates currency and coinage.
5. State undertakes steps for the creation of necessary conditions for the socio-economic-
politico-cultural development of the people.
6. State grants citizenship and protects their interests and rights.
7. State conducts foreign relations, foreign trade and economic relations.
8. State secures the goals of national interest in international relations

Nonstate Institutions
Nonstate institutions are people and/ or organization that participate in international
affairs and relations but are not affiliated with any state or nation.
These nonstate institutions include the following: bank and corporations, cooperatives and
trade unions, transnational advocacy groups, and development agencies and international

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organizations. These nonstate institutions are equally capable of influencing policy formation and
implementation.
a. Banks
Bank is a financial institution licensed to provide several financial services to different
types of customers. Banks are in operation mainly for their deposits and lending
functions. Customers are allowed to deposit their money to banks which grow through an
interest rate. Banks also provide loans, with an interest to customers who need money
either for personal consumption or for investment and businesses. Banks may be
categorized into major forms such as commercial banks and investment banks.

 Universal bank
A universal bank is considered the biggest bank in terms of assets, loan portfolio, and
revenue.
Under the new rule, universal banks with more than 100 branches would need to
have at least P20 billion in capital. Commercial banks with more than 100 branches would
need P15 billion. (https://business.inquirer.net/180647/capital-requirements-on-banks-
raised).

 Commercial bank
It is a type of bank that provides commercial loans and offers investment products in
addition to the regular banking service of accepting deposits. Compared to a universal bank
is has more limited banking services.
Commercial banks are privately-owned institutions that accept deposits and lend
money to projects to earn interest. They also offer personal, business, and mortgage loans,
checking account services, and basic financial products like savings accounts and certificate
of deposit to individuals and businesses. They are primarily owned by shareholders and are
profit-based.

 Thrift bank
Thrift bank, as defined in Republic Act No. 7906, include savings and mortgage banks,
private development banks, and stock savings, loan associations, and microfinance thrift
banks that are organized under existing laws for the following purposes:
a. Accumulating and investing the savings of depositors
b. Providing working capital to businesses engaged in agriculture, service and housing
c. Providing diversified financial services to individuals and small and medium
enterprises

 Rural bank and cooperative bank

Rural and cooperative banks are organized and operating in rural areas. They are intended to
promote and expand the rural economy by providing the people with the basic financial
services.

They differ in type of ownership.

 Rural banks are owned and managed by private entities or individuals.
 Cooperative banks are owned, organized and managed by cooperatives or federation
of cooperatives.
The primary target markets of rural and cooperative banks are farmers who need
financial help in the production and marketing of agricultural products. Rural and
cooperative banks are also engaged in micro financing to assist small individual
entrepreneurs.

 Islamic bank
The Islamic bank, which has been created and organized under R.A. No. 6848, aims to
promote and accelerate the socio-economic development of the Autonomous Region of
Muslim Mindanao by performing banking, financing, and investment operations and to
establish and participate in agricultural, and industrial ventures based on the Islamic
concept of banking.

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 All business dealings and activities of the Islamic Bank are subject to the basic
principles and rulings of Islamic Sharia/Sharia’h Law.
Islamic banking is a banking system that is based on the principles of Islamic or
Shari’ah law and guided by Islamic economics. Two fundamental principles of Islamic
banking are the sharing of profit and loss, and the prohibition of the collection and payment
of interest by lenders and investors. Islamic law prohibits collecting interest or riba. Islamic
banks make a profit through equity participation, which requires a borrower to give the bank
a share in their profits rather than paying interest.
Currently, the country has only one Islamic bank, Al Amanah Islamic Investment
Bank of the Philippines. A subsidiary of the state-owned Development Bank of the
Philippines, AAIIBP had total assets of P797.3 million at the end of last year.

 Savings and Loans Association

A savings and loan association, sometime referred to as a financing and mortgage loan
company, is a financial institution that is engaged in the business of accumulating the
savings of its members and stockholders, and using accumulations for loans or investments
in securities of productive enterprises.
The savings and loans association, which can be stock or non-stock, is created and
regulated under R.A No. 3779, as amended by R.A. No. 4378.
The unique feature of the financing and mortgage loan Company is that the depositors
are also the member-borrowers of the association. In case the financing and mortgage loan
company is a stock, corporation, the members have voting rights and may control the
association’s operation.
Visit http://www.bsp.gov.ph/banking/directory for the list of Savings and Loans Association.

 Trust companies
A trust company is a legal business entity, usually a major division of a universal or
commercial bank that acts as a fiduciary agent or trustee on behalf of an individual person
or corporate entity for the purpose of management, administration, and final transfer of
property to the beneficiary.
In other words, the trust company acts as the custodian of the property for and on
behalf of the beneficiary for a fee. It also performs the following related custodial tasks:
a. Asset management
b. Ownership registration for the beneficiary
c. Stock transfer
d. Custodial arrangement like in court proceedings
A trust company may also be appointed as the administrator of the properties of a
decedent when indicated in the last will and testament. In this case, the trust
company is responsible for the distribution of the net estate to the beneficiary after
accounting and paying all debts and taxes.

 Credit Unions
A credit union is a financial depository institution that is mainly controlled and
operated by its members for the following purposes:

a. Extending credit to members

b. Offering competitive interest rates
c. Promoting the concept of thrift
d. Providing other types of financial services

Credit unions, on the other hand, are not-for-profit institutions. Technically, credit
unions are owned by their account holders, known as members. Any profit earned by a
credit union is either invested back into the organization or paid out to members as a
dividend [source: Federal Reserve].
Credit unions were designed to be cooperative financial institutions for people who share
a common bond. Members of a credit union may work for the same company or
organization, attend the same college, serve in the armed forces, belong to the same church
or live in the same community.

b. Corporations
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 It is a form of business operation that declares the business as a separate entity guided
by a group of officers known as the Board of Directors. They were created by individuals,
stockholders or shareholders, with the purpose of operating for profit. They have all legal
rights of an individual, except for the right to vote and certain limitations. They are given
the right to exist by the state that issues their charter. Corporation example includes
General Motors Corporation an icon of American craftmanship, Apple Corporation as one
of the famous tech companies, Amazon Corporation founded by Jeff Bezos is the world’s
leading eCommerce and innovation company, Domino’s Pizza is a global food chain
company delivering quality food worldwide.

Common Types of Corporations

A corporation can be created by a single shareholder or by multiple shareholders
who come together to pursue common goal. A corporate can be formed as a for-profit or a
non-for-profit entity.
 For-profit entities form most corporations, and they are formed to generate revenues
and provide a return to their shareholders, according to their percentage of ownership
in the corporation. Examples: HBO in partnership with International Rescue
Committee, Ford Motors and Lynda.com.
 Not-for-profit entities operate under the category of charitable organizations, which are
dedicated to a particular social cause such as educational, religious, scientific, or
research purposes. Rather than distribute revenues to shareholders, not-for-profit
organizations use their revenues to further their objectives. Human Rights Campaign is
a very impressive example of using Facebook profile photos to spread the word far and
wide about campaign. Greenpeace the environmental non-profit that used GPS
technology to inform the public about their cause.

Multinational Corporations (MNCs) are business organization that extends

ownership, management, production, and sales activities into several or more countries.
MNCs are boon to the economic growth and development of the states.

c. Cooperatives
Cooperatives are people-centers enterprises owned, controlled and run by and
for their members to realize their common economic, social, and cultural needs and
aspirations.
Cooperatives are businesses governed on the principle of one member, one
vote. There are several common types of co-ops, including cooperatives owned and
operated by:
a. The people working there (worker cooperatives);
b. The people buying the co-op’s goods or services (consumer cooperatives)
c. The people collaborating to process and market their products (producer
cooperatives); and
d. Groups uniting to enhance their purchasing power (purchasing cooperatives)

Cooperatives play a critical role in building community wealth for several key reasons:
a. They often provide quality goods and services to areas that have been shunned
by traditional businesses because they are deemed less profitable
b. They typically invest in local communities
c. Since most cooperative members are local residents, business profits remain
and circulate in the community
d. Cooperative membership builds social networks and strengthens social cohesion
which are essential elements of a strong, healthy communities by connecting
diverse community residents
e. Purchasing cooperatives help small, local businesses remains competitive within
markets dominated by large, national retailers
f. Worker cooperatives create quality, empowering jobs for community members

d. Trade Unions/Labor Unions

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 Trade Unions are organizations formed by workers from related fields that work for
common interest of its members. They help workers in issues like fairness of pay, good
working environment, hours of work and benefits. They represent a cluster of workers
and provide a link between the management and workers.
The purpose of these unions is to look into the grievances of wagers and present a
collective voice in front of the management. It acts as the medium of communication
between the workers and management. Among these trade unions that exist in the
Philippines are the Federation of Free Workers (FFW), Kilusang Mayo Uno (KMU) and the
Trade Union Congress of the Philippines (TUCP).
Functions of Trade Unions:
1. Advocating for fairness and equality for workers’ compensations
2. Securing better working conditions for workers
3. Trade Unions will organize strikes and demonstrations on behalf of worker
demands
4. Fight for social welfare for workers
5. Promote and advocate for education and proper training for workers
6. Advocate and fight the government for legislative protections of the workers
7. Promote and advocate for organizational growth and stability
8. Trade Unions acts as representatives of workers in national and international
forums
9. Involved in collective bargaining agreements and disputes with management to
settle any conditions on employment
10.Advising management on correct personnel policies and procedures
11.Involved in collective and personal collective grievances between management
and workers.

e. Transnational Advocacy Groups

Transnational Advocacy Groups (TAGs) play an increasingly important role in
international and regional politics and have contributed to changing policies of
multilateral organizations and states. They are particularly visible in contentious areas
as human rights, environmental issues, international peace, and women’s rights. They
have specific roles to partake that can be achieved through effective measures, case-
specific methods, and activities.
TAGs serve as international catalysts for change, aiming to achieve international
changes towards policies and practices. The very essence of TAGS is the formation and
development of their advocacies and campaigns that represent causes, ideas, values, and
beliefs.
Human Rights Watch and Amnesty are active in the human rights field. Oxfam
and Save children deal with humanitarian issues. Greenpeace and Friends of the Earth
represent environmental concerns.

f. Development Agencies
Development Agencies have been established to develop the cooperation between
the public sector, private sector, and civil society. These are organizations with specific
aims and goals. The common denominator among these organizations is the term
development. These agencies concentrate on the growth, progression, and advancement
of specific concerns, which can be infrastructure or social institutions.

Types of Development Agencies:

International Organization is an institution with membership drawn
from two or more countries. Its activities transcend national boundaries as it
facilitates cooperation among its members in the performance of one or more
tasks. The international organization can be public or private. A public
organization is an international government organization (IGO) with states as its
members. Prominent examples of IGOs are United Nations, the North Atlantic
Treaty Organization (NATO), International Monetary Fund (IMF), European Union

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 (EU), Association of Southeast Asian Nations (ASEAN), and World Health
Organization (WHO). A private organization has a membership of individuals or
groups and is an international nongovernment organization (INGO) that originate
for reasons other than politics such as International Criminal Police Organization
(Interpol). INGOs may lobby or work regularly with the government and IGOs.
Non-government Organization is a non-profit group that functions
independently of any government. It serves the social or political goals such as
humanitarian and environmental causes. Most NGOs aim to promote the practice
of democracy among societies and social change through their initiatives and
organizational methods. Many NGOs have targeted their efforts toward
population groups that tend to be underserved by governmental programs,
including women, the aged, physically and mentally disabled persons, the poor,
and various social groups that have been marginalized by virtue of race, religion,
ethnicity, caste, and social class.

Interrelationship of Government and Non-state Institutions

Government rules society. This reflects how powerful government institution can be. If
nonstate institutions interfere with the governing body, two possible things can happen:
1. Integration among these two institutions may take place to achieve precise solution
towards development
2. Conflict and tension may also arise because one could exceed the other in terms of
societal control and influences (Penninx, 2013)

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