Not-for-profit Provision of Public Services
AbstractNot-for-profit firms are greatly over-represented in the childcare, medical care, education and care for the aged sectors where service providing workers, as well as purchasers, seem to care about the level or quality of service being provided. Since all individuals who care about service levels receive non-excludable benefits, these services have a public good element. Such care can be used to motivate employees to perform tasks beyond their strict job description. But such care only motivates effort if workers believe it affects the final level of provision. Since nonprofit status ensures management is not directly concerned with profit, or not answerable to owners with such concerns, it ensures workers' efforts 'matter' by committing the firm to not expropriating extra worker effort to lower costs or raise profits. Nonprofit firms can thus motivate their work force in a way that for-profit firms cannot match.
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Bibliographic InfoPaper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 02/060.
Length: 10 pages
Date of creation: Sep 2002
Date of revision:
structure; scope of government; publicly provided private good; altruism;
Other versions of this item:
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-11-03 (All new papers)
- NEP-MFD-2003-11-03 (Microfinance)
- NEP-URE-2003-11-03 (Urban & Real Estate Economics)
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