Analysis of Cross-Country Differences in the Non-Profit Sector Size

This paper theoretically and empirically investigates variations in the size of the non-profit sector among countries. Although the non-profit sector has experienced growth in relative socio-economic importance in recent decades, the available data on the size of the sector indicates substantial variations among countries. Existing literature provides several multi- and interdisciplinary theories, hypotheses and concepts that try to explain those differences, such as for instance the heterogeneity and failure theories, the resource dependence theory and interdependence theory. Empirical findings indicate that the selection of the measurement of sector size influences the ability to explain the differences in the size of the sector across countries. The results of a crosssection regression analysis indicate that almost three quarters of cross-national variation in the sector workforce could be explained, whereas pooled regression indicates that almost three fifths of variation in sector size, if workforce and expenditures are taken as dimensions of the sector, could be explained. Moreover, regression analysis tends to support the propositions of resource dependence and demand heterogeneity (government failure) theory, although there is also some ground for supporting the interdependence theory.