CONSORTIUM/INTERGOVERNMENTAL CORPORATIONS AND CONSORTIUMS
Quasi-business associations formed to provide services, arrange financing, or operate certain enterprises.
The involvement of more than one state or institution can be advantageous in expanding
the financial and administrative resources available to the entity and, in some cases, permitting services or products to be distributed on a larger and more efficient scale. Various banks, for example, may form a consortium with a government to finance a major development project that is too large for one bank to finance alone.
The terms of the agreement forming the consortium
or corporation will determine the reciprocal
rights and duties of the members of the
entity.While in practical terms there may be little
difference between an intergovernmental
consortium or corporation, the usual ad hoc
nature of a consortium suggests its use for individual
projects with a definite completion
schedule. The widespread use of the corporate
framework in other circumstances indicates that
the corporate form works well when the entity
must provide services over an indefinite period
of time. The corporate structure, with its separate
board of directors and management, can
also protect the independence of the entity from
direct political control and may help to facilitate
access to private financial markets.
