Economic Theories of Nonprofit Organizations

Does Out-Contracting of Welfare Services Promote Active Citizenship?

“…Economic theories of nonprofit organisations try in principle to answer the question of why we need the third sector when we have a market and a state. In order to do this, these theories identify essential aspects of each of the institutional sectors and explain why and how they are different (Steinberg 2006;Salamon and Toepler 2015). These aspects are general, theoretical features of the institutional sectors and their relevance in a Scandinavian context varies according to how the states govern the providers in the different service areas.…”

“…To ensure affordable prices for the population, the government can pay for the service through voucher systems or subsidies. To remedy the lack of trust, public authorities can regulate the service and provide increased information flow to users (Steinberg 2006). However, public authorities cannot fully compensate for the failures of the for-profits.…”

User Democracy in Schools? Comparing Norwegian Schools With Nursing Homes

“…Expanding the available range of services also promotes user control inasmuch as more citizens can find suitable services for their needs. Economic theories of nonprofit organizations explain how providers from different economic sectors play different roles in creating more complete markets (Steinberger, 2006). In a classical study, Weisbrod (1978) argued that although public providers design services for the average voter and for-profit providers for the biggest market segment, nonprofits often cater to smaller niches that otherwise would not be served.…”

“…The division of providers from the public, nonprofit, and for-profit sectors make up the welfare mix. Research on the importance of welfare mix has documented that providers from different sectors are inherently different (Salamon, 1987;Steinberger, 2006), but it is less clear how these differences matter for democratic user control.…”

Connecting the Dots for Social Value: A Review on Social Networks and Social Entrepreneurship

“…Economists working on non-profit organizations advance the market and state-failure arguments to explain why there is a demand for non-profit and other 'third-sector' organizations (for reviews, see Anheier 2005;Steinberg 2006). Santos (2012) refines this argument with respect to social entrepreneurship and argues that the latter consists in creating value -as opposed to capturing value -by pursuing sustainable solutions to neglected problems with positive externalities in situations of simultaneous market and government failure.…”