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Leadership and Economic Theories of Nonprofit Organizations

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  • Joseph Wallis
  • Brian Dollery

Abstract

Economic theories of nonprofit organizations (NPOs) have modified standard economic assumptions to explain altruism and nonprofit entrepreneurship but have neglected their dependence on leadership due to the traditional reluctance of economists to consider phenomena associated with preference change. The relevance of Hermalin's (1998) model of leadership by example and Casson's (1991) theory of leadership through moral manipulation are considered within an NPO context where leaders seek to influence stakeholder commitments to the organization's quest. The propositions Elster (1998) advanced with regard to the relationship between the emotions and decision making are then applied in a theory that explains how NPO leaders can develop a culture of hope that maintains the quality control and product differentiation advantages claimed for these organizations. It is argued that policymakers should consider the dependence of NPOs on the quality of leadership when choosing the organizational mechanism for social service delivery.

Suggested Citation

  • Joseph Wallis & Brian Dollery, 2005. "Leadership and Economic Theories of Nonprofit Organizations," Review of Policy Research, Policy Studies Organization, vol. 22(4), pages 483-499, July.
    • Handle: RePEc:bla:revpol:v:22:y:2005:i:4:p:483-499
    DOI: 10.1111/j.1541-1338.2005.00151.x
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    Cited by:

    1. Panagiota Xanthopoulou & Vassilis Kefis, 2019. "Public Organisations and Public Management in Greece: The Implementation of Private Management Tools in the Public Sector," International Journal of Sciences, Office ijSciences, vol. 8(03), pages 45-54, March.
    2. Robert Toutkoushian & Manu Raghav, 2021. "Estimated Profit: A Look at the Excess Revenues of Private Four-Year Nonprofit Postsecondary Institutions," Education Finance and Policy, MIT Press, vol. 16(1), pages 125-145, Winter.

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