The Changing Relationship Between the Government and the Nonprofit Sector in Iceland

Abstract

The paper illustrates a historical examination of nonprofit relations in welfare services in Iceland. Variables affecting the conditions under which different types of relations are developed are defined. The findings from the Icelandic case study coincide with other international studies describing some general changes in government-nonprofit relations in the 20 th century, from supplementary to more complex complementary and adversarial relations using Young's conceptualization. There are, however, some distinguishing features. The supplementary phase was prolonged when compared to other countries and nonprofits' leading role in public policy making and provision of welfare services more prominent. A small and reactive public administration can be considered an important explanatory factor. Governmental effort to define a formal contractual relationship in the spirit of new public management at the end of the century have seemingly not lead to fundamental changes in the partners' interaction. Stjórnmál og stjórnsýsla veftímarit (fraeðigreinar) The Changing Relationship Between the Nonprofit Sector 251 1 There are several definitions of the collaboration between the relevant entities. In its basic form, the relation includes voluntary long-term cooperation, informal or formal, between any governmental unit(s) and autonomous nonprofit organization(s), based on some kind of mutual benefits. The expected advantages of the cooperation include benefits of some kind, increased efficiency, effectiveness, cost savings, flexibility, or increased operational capacity or quality. and international context. Young's (2000) study defining three types of relations is used as a conceptual framework. Conceptualization of government-nonprofit relations Dennis R. Young (2000) conceptualized the government-nonprofit relation in a historical review of the relationship in the United States, United Kingdom, Israel and Japan. A comparable models has been put forward by Najam (1996) and Coston (1998). According to Young's taxonomy, the relation can be defined as supplementary, complementary or adversarial. In line with the supplementary approach, nonprofits simply respond to unmet demands for public goods not fulfilled by the government. Young elaborates on Weisbrod's work (1977) on the economic theory of the nonprofit sector. Weisbrod argues that when preferences are heterogeneous, the government responding to the "median voter" is not able to fulfill the needs of all citizens. Provision of public goods is therefore left unsatisfied and the field is therefore open for the nonprofit sector to fill the gap. Young asserts that citizen preferences can vary widely across governmental areas or domains. For example, citizen preferences can be expected to be homogeneous in the areas of policing and military defense and therefore less important for nonprofit involvement. In the case of the arts, on the other hand, the preferences can differ extensively, and consequently, the role of nonprofits can be seen as highly important. Young also uses th...

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