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For-Profit, State, and Nonprofit: How to Cut the Pie Among the Three Sectors

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  • Avner Ben-Ner

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Abstract

What is the best way to deliver various goods and services in the advanced complex economy? What is the appropriate division of labor among the state, the private for-profit, and the nonprofit sectors? This paper explores these questions relative to the well-being of consumers, and offers a set of broad answers grounded in a benefit-cost analysis that balances (1) the relative value derived by consumers and customers from their relations with organizations from the three sectors, and (2) the relative efficiency of the internal organization of these types of organizations. The paper illustrates this benefit-cost analysis in the context of several industries.

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Bibliographic Info

Paper provided by Human Resources and Labor Studies, University of Minnesota (Twin Cities Campus) in its series Working Papers with number 0304.

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Handle: RePEc:hrr:papers:0304

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Keywords: Three-Sector Economy; Division of labor among for-profit firms; state; and nonprofit organizations; Organization-consumer interface; Comparative analysis of agency problems; Production of public goods;

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  1. Bilodeau, Marc & Slivinski, Al, 1996. "Volunteering nonprofit entrepreneurial services," Journal of Economic Behavior & Organization, Elsevier, vol. 31(1), pages 117-127, October.
  2. Hansmann, Henry, 1985. "The Organization of Insurance Companies: Mutual versus Stock," Journal of Law, Economics and Organization, Oxford University Press, vol. 1(1), pages 125-53, Spring.
  3. A. Mitchell Polinsky & Steven Shavell, 1999. "The Economic Theory of Public Enforcement of Law," NBER Working Papers 6993, National Bureau of Economic Research, Inc.
  4. Sören Blomquist & Vidar Christiansen, 2003. "Is there a Case for Public Provision of Private Goods if Preferences are Heterogeneous? An Example with Day Care," CESifo Working Paper Series 938, CESifo Group Munich.
  5. Estelle James, 1993. "Why Do Different Countries Choose a Different Public-Private Mix of Educational Services?," Journal of Human Resources, University of Wisconsin Press, vol. 28(3), pages 571-592.
  6. Stiglitz, Joseph E, 1974. "Incentives and Risk Sharing in Sharecropping," Review of Economic Studies, Wiley Blackwell, vol. 41(2), pages 219-55, April.
  7. George A. Akerlof & Rachel E. Kranton, 2002. "Identity and Schooling: Some Lessons for the Economics of Education," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1167-1201, December.
  8. Edward L. Glaeser & Andrei Shleifer, 2003. "The Rise of the Regulatory State," Journal of Economic Literature, American Economic Association, vol. 41(2), pages 401-425, June.
  9. Ben-Ner Avner & Montias John Michael & Neuberger Egon, 1993. "Basic Issues in Organizations: A Comparative Perspective," Journal of Comparative Economics, Elsevier, vol. 17(2), pages 207-242, June.
  10. William M. Landes & Richard A. Posner, 1974. "The Private Enforcement of Law," NBER Working Papers 0062, National Bureau of Economic Research, Inc.
  11. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
  12. Edward L. Glaeser & Andrei Shleifer, 1998. "Not-For-Profit Entrepreneurs," Harvard Institute of Economic Research Working Papers 1852, Harvard - Institute of Economic Research.
  13. Avner Ben-Ner & Louis Putterman, 2000. "Values Matter," World Economics, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 1(1), pages 39-60, January.
  14. Holmstrom, Bengt & Milgrom, Paul, 1994. "The Firm as an Incentive System," American Economic Review, American Economic Association, vol. 84(4), pages 972-91, September.
  15. John Vickers & George Yarrow, 1988. "Privatization: An Economic Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262720116, December.
  16. Ben-Ner, Avner & Jun, Byoung, 1996. "Employee Buyout in a Bargaining Game with Asymmetric Information," American Economic Review, American Economic Association, vol. 86(3), pages 502-23, June.
  17. C.D. Ehlermann, 1992. "European Community Competition Policy, Public Enterprise And The Cooperative, Mutual And Nonprofit Sector," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 63(4), pages 555-571, October.
  18. Dreze, Jacques H & Hagen, Kare P, 1978. "Choice of Product Quality: Equilibrium and Efficiency," Econometrica, Econometric Society, vol. 46(3), pages 493-513, May.
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