The Third Sector in Europe

The Third Sector in Europe

Globalization and Welfare series

Edited by Adalbert Evers and Jean-Louis Laville

This book explores Europe’s third sector – the non-profit organisations and providers of social services such as mutuals, co-operatives, associations, voluntary organisations and charities: these elements of a civil society are important yet often overlooked features in contemporary socio-economics and social policy.

Chapter 11: Alternative paradigms for the mixed economy: will sector matter?

Ralph M. Kramer

Subjects: economics and finance, welfare economics, social policy and sociology, comparative social policy, economics of social policy


Ralph M. Kramer INTRODUCTION: CRITIQUE OF THE SECTOR CONCEPT Between the late 1940s and the 1980s, the number of non-profit organizations in the United States increased from about 50 000 to over 1 400 000; similar patterns of exponential growth occurred in other post-industrial and developing nations worldwide. Originating in the economic and political conditions associated with the postwar ‘crisis of the welfare state’, the non-profit sector has joined the public sector and the private sector as a pillar of the political economy of modern society. The first efforts of account for the development and character of the nonprofit sector were by economists using neoclassical concepts of state or market ‘failure’, or trust, as explanatory variables (Hansmann, 1987, 1996; Ortmann, 1996; Steinberg, 1997). These macroeconomic models, however, failed to capture the critical dimensions of the third sector beyond some imputed compensatory functions. Nor did they explain cross-national variations in the size and composition of the third sector (DiMaggio and Anheier, 1990; Lifset, 1989). Economic models have also been faulted for their reductiveness, empirical circularity and ethical obtuseness (Hall, 1998; Voluntas, 1997, esp. pp.97–119). In the twenty-first century, the dominant theoretical perspective on the development and character of the non-profit sector is still a model based on the form of organizational ownership. Typically, it emphasizes the rapid institutionalization of the third sector as the core of civil society, as the state’s primary partner in the provision of human services and the promotion of culture and the arts. At the same...

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