The Economics Of The Non-Distribution Constraint: A Critical Reappraisal
AbstractThis paper re-examines the non-distribution constraint as a key structural feature of non-profit organization. It argues that its traditional understanding as a trustworthiness-enhancing device is incomplete. This paper shows that the non-distribution constraint is also a reflection of the directly utility-enhancing character of involvement in non-profit firms for their key stakeholders. This alternative explanation allows one to solve the central puzzle of trustworthiness theory: why doesn't the non-distribution constraint destroy entrepreneurial motivation? Additionally, it helps one to understand the role of the non-distribution constraint in economic theories of non-profit organization that do not rely on trustworthiness theory. Finally, it enables one to logically integrate the different economic theories of non-profit organization. Copyright � 2008 The Author Journal compilation � CIRIEC 2008.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Annals of Public and Cooperative Economics.
Volume (Year): 79 (2008)
Issue (Month): 1 (03)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1370-4788
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- Sacchetti, Silvia & Tortia, Ermanno, 2012. "The internal and external governance of cooperatives: the effective membership and consistency of value," AICCON Working Papers 111-2012, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
- Silvia Sacchetti & Ermanno C. Tortia, 2010. "A NEW FRAMEWORK FOR THE ECONOMIC ANALYSIS OF COOPERATIVE FIRMS: Self-defined rules, common resources, motivations, and incentives," Econometica Working Papers wp21, Econometica.
- Vladislav Valentinov, 2012. "Toward a holistic nonprofit economics: insights from institutionalism and systems theory," Journal of Bioeconomics, Springer, vol. 14(1), pages 77-89, April.
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