IDEAS home Printed from https://ideas.repec.org/a/bpj/nonpfo/v5y2014i2p31n2.html
   My bibliography  Save this article

Overcoming the Cause of Failure and the Role of Issue Salience: Toward a Comprehensive Theory for Nonprofit Activity and Competition in a Three-Sector Economy

Author

Listed:
  • Faulk Lewis

    (American University, Washington, DC, USA)

Abstract

This paper extends the theoretical framework of nonprofit activity in three-sector economies. Perspectives from existing theories on nonprofit organizations and the agenda setting literature are simultaneously considered. The nonprofit form provides one solution to the causes of market failure that are inherent to the different classes of goods discussed by previous theory. However, issue salience can lead to public policies that correct market failures. Such policies can lead to greater competition for tax-supported funding and to for-profit entry. This combined framework allows for the integration of the various theories on the existence of nonprofit organizations under one theoretical lens. It also yields a framework to empirically analyze industry dynamics and inter-organizational competition specifically within nonprofit and mixed-sector markets. The temporal variation and relative strength of issue salience in various mission areas in which nonprofits participate are particularly considered. This theoretical perspective leads to several important implications for industrial structure, nonprofit competition for resources and market share, public policy, advocacy, contracting, and public–private partnerships as the issues nonprofits address evolve over time.

Suggested Citation

  • Faulk Lewis, 2014. "Overcoming the Cause of Failure and the Role of Issue Salience: Toward a Comprehensive Theory for Nonprofit Activity and Competition in a Three-Sector Economy," Nonprofit Policy Forum, De Gruyter, vol. 5(2), pages 1-31, October.
    • Handle: RePEc:bpj:nonpfo:v:5:y:2014:i:2:p:31:n:2
    DOI: 10.1515/npf-2014-0004
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/npf-2014-0004
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/npf-2014-0004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    2. Elinor Ostrom, 2000. "Collective Action and the Evolution of Social Norms," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 137-158, Summer.
    3. Richard Steinberg, 1986. "The Revealed Objective Functions of Nonprofit Firms," RAND Journal of Economics, The RAND Corporation, vol. 17(4), pages 508-526, Winter.
    4. Bruce A. Seaman & Dennis R. Young (ed.), 2010. "Handbook of Research on Nonprofit Economics and Management," Books, Edward Elgar Publishing, number 12757.
    5. Lakdawalla, Darius & Philipson, Tomas, 2006. "The nonprofit sector and industry performance," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1681-1698, September.
    6. Jeremy Thornton, 2008. "Competition, Contractibility, and the Market for Donors to Nonprofits," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 24(1), pages 215-246, May.
    7. Feigenbaum, Susan, 1987. "Competition and Performance in the Nonprofit Sector: The Case of U.S. Medical Research Charities," Journal of Industrial Economics, Wiley Blackwell, vol. 35(3), pages 241-253, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Peter Nunnenkamp & Hannes Öhler & Tillmann Schwörer, 2011. "US based NGOs in International Development Cooperation: Survival of the Fittest?," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 83, Courant Research Centre PEG.
    2. repec:mje:mjejnl:v:12:y:2017:i:1:p:125-140 is not listed on IDEAS
    3. Wang, Sen & Bogle, Tim & van Kooten, G. Cornelis, 2012. "Forestry and the New Institutional Economics," Working Papers 130818, University of Victoria, Resource Economics and Policy.
    4. Lapointe, Simon & Perroni, Carlo & Scharf, Kimberley & Tukiainen, Janne, 2018. "Does market size matter for charities?," Journal of Public Economics, Elsevier, vol. 168(C), pages 127-145.
    5. Crettez, Bertrand & Hayek, Naila & Zaccour, Georges, 2020. "Do charities spend more on their social programs when they cooperate than when they compete?," European Journal of Operational Research, Elsevier, vol. 283(3), pages 1055-1063.
    6. Frank A.G. den Butter, 2010. "Transaction Management: Value Creation by Reducing Transaction Costs," Tinbergen Institute Discussion Papers 10-051/3, Tinbergen Institute.
    7. de Reuver, Mark & van der Lei, Telli & Lukszo, Zofia, 2016. "How should grid operators govern smart grid innovation projects? An embedded case study approach," Energy Policy, Elsevier, vol. 97(C), pages 628-635.
    8. Veselin Draskovic & Evgeny Popov & Kestutis K. Peleckis, 2017. "Modelling of Institutional Changes in Transition Countries - the Gap Between the Theory and Practice," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 13(1), pages 125-140.
    9. Brendan Markey‐Towler, 2019. "The New Microeconomics: A Psychological, Institutional, and Evolutionary Paradigm with Neoclassical Economics as a Special Case," American Journal of Economics and Sociology, Wiley Blackwell, vol. 78(1), pages 95-135, January.
    10. Ly, Pierre & Mason, Geri, 2012. "Competition Between Microfinance NGOs: Evidence from Kiva," World Development, Elsevier, vol. 40(3), pages 643-655.
    11. Gayle, Philip G. & Harrison, Teresa D. & Thornton, Jeremy, 2017. "Entry, donor market size, and competitive conduct among nonprofit firms," International Journal of Industrial Organization, Elsevier, vol. 50(C), pages 294-318.
    12. Tadesse, G. & Badiane, O., 2018. "The Boundary of Agricultural Marketing Cooperatives in Africa: A Conceptual framework and empirical evidence from Ethiopia," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276964, International Association of Agricultural Economists.
    13. Vladislav Valentinov, 2009. "The German Gemeinwirtschaftslehre: Implications for modern nonprofit economics," Regulation & Governance, John Wiley & Sons, vol. 3(2), pages 186-195, June.
    14. Valentinov, Vladislav, 2009. "Managerial nonpecuniary preferences in the market failure theories of nonprofit organisation," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 36(1/2), pages 81-92.
    15. Nunnenkamp, Peter & Öhler, Hannes & Schwörer, Tillmann, 2013. "US based NGOs in International Development: Financial and Economic Determinants of Survival," World Development, Elsevier, vol. 46(C), pages 45-65.
    16. Crettez, Bertrand & Hayek, Naila & Zaccour, Georges, 2021. "Optimal dynamic management of a charity under imperfect altruism," Omega, Elsevier, vol. 100(C).
    17. Susan F. Lu, 2016. "The Role of Donations in Quality Disclosure: Evidence from Nonprofit Nursing Homes Full Access," American Journal of Health Economics, MIT Press, vol. 2(4), pages 431-462, Fall.
    18. Gary D. Libecap, 2014. "Addressing Global Environmental Externalities: Transaction Costs Considerations," Journal of Economic Literature, American Economic Association, vol. 52(2), pages 424-479, June.
    19. Jonathan Meer & Hedieh Tajali, 2023. "Effects of the Minimum Wage on the Nonprofit Sector," NBER Working Papers 31281, National Bureau of Economic Research, Inc.
    20. Zhan Wang & Xiangzheng Deng & Cecilia Wong, 2016. "Integrated Land Governance for Eco-Urbanization," Sustainability, MDPI, vol. 8(9), pages 1-16, September.
    21. Thornton, Jeremy, 2010. "Explaining unrestricted giving by charitable foundations: A transaction cost approach," International Journal of Industrial Organization, Elsevier, vol. 28(1), pages 44-53, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:nonpfo:v:5:y:2014:i:2:p:31:n:2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.