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Whatever the value of government-sponsored entities in the past, is the public benefiting from them today? Is the intermittent tradition of antagonism against mercantilist companies justified? Has the special purpose GSE charter outlived today's fast-moving financial markets?

GSEs illustrate the consequences of state and federal legislation to design hybrid organizations that combine private control and ownership with governmental subsidies. A peculiar legal framework determines much of the behavior of the GSEs. They represent an old institutional form that has taken on new vitality because of political strength that protects their government subsidies and allows them to expand in the marketplace.

Thomas H. Stanton traces their origins to mercantilist concerns of the sixteenth century, contrasts investor-owned and cooperative GSEs, and examines design issues, activities, size, legal attributes, charter powers, the fulfillment of public purposes, and the quality of oversight.

The author follows up his comprehensive examination of the six special enterprises--Fannie Mae, Freddie Mac, the Federal Home Loan Bank System, the Farm Credit System, Farmer Mac, and Sallie Mae--with an analysis of the overall life cycle of the instrumentalities and exit strategies for those approaching the end of their usefulness.

Thomas H. Stanton is a Washington, D.C. attorney, the chairman of the Standing Panel on Executive Organization and Management of the National Academy of Public Administration, and a fellow of the Center for the Study of American Government at Johns Hopkins University.