What is a government corporation?


Quick Answer

A government corporation is a state-owned entity that is created in order to pursue commercial or industrial activities on behalf of a national government. These can be completely owned or partially owned by a government.

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Full Answer

Government corporations typically have unique tax and legal statuses that differentiate them between state agencies and commercial enterprises. The nature of the corporation is not required to be directly correlated with the government, but it will be in association in some type of way. Government corporations are most common in sectors involving natural monopolies. Such sectors include energy production and exploitation of natural resources. For instance, most OPEC countries have government corporations managing their oil production.

Other forms of government corporations are common in areas of strategic interest for the government. For instance, government corporations often administer large-scale infrastructure projects that use large quantities of public investment or resources. An example of this is the Tennessee Valley Authority, a government corporation founded in 1933 to undertake a broad variety of economic development programs for the Tennessee Valley in response to the Great Depression.

Broadcasting is another area of commercial activity that often attracts government corporations. For instance, the Corporation for Public Broadcasting in the United States and the British Broadcasting Corporation in the United Kingdom are both examples of government corporations established to provide cultural and journalistic services with public financing.

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