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Understanding the rural third sector: insights from Veblen and Bogdanov

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  • Valentinov, Vladislav

Abstract

Purpose: Despite the worldwide importance of third sector organizations in rural areas, the theoretical connection between the third sector and rural development remains largely unexplored. The purpose of this paper is to develop a theoretical explanation of why and how third sector organizations contribute to rural development. Design/methodology/approach: The paper builds upon the institutional economics of Thorstein Veblen and the tektology of Alexander Bogdanov. Tektology is used as an instrument to bring Veblenian criticism of pecuniary culture to bear on the explanation of the rural third sector. Findings: Based on the tektological law of systems divergence, the Veblenian pecuniary‐industrial dichotomy and rural‐urban disparities are shown to be interrelated evolutionary consequences of pecuniary culture. Third sector organizations' contribution to rural development is explained in terms of the tektological notion of counter‐differentiation. Applied to pecuniary culture, counter‐differentiation involves attenuating its basic ingredients, such as private ownership and pecuniary motivation. This is achieved through third sector organizations' characteristics such as profit appropriation constraint and nonpecuniary goal orientation, respectively. Originality/value: The paper identifies the institutional economics implications of the general systems theory and utilizes these implications to inform the research on the internationally relevant problem of rural development.

Suggested Citation

  • Valentinov, Vladislav, 2012. "Understanding the rural third sector: insights from Veblen and Bogdanov," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 41(1/2), pages 177-188.
    • Handle: RePEc:zbw:espost:206875
    DOI: 10.1108/03684921211213016
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    References listed on IDEAS

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    1. Valentinov, Vladislav, 2009. "Third sector organizations in rural development: a transaction cost perspective," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 18(1), pages 3-15.
    2. Jonathan Kydd & Andrew Dorward, 2004. "Implications of market and coordination failures for rural development in least developed countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(7), pages 951-970.
    3. Constantine Iliopoulos & Vladislav Valentinov, 2009. "Toward an economics of the rural third sector," International Journal of Agricultural Resources, Governance and Ecology, Inderscience Enterprises Ltd, vol. 8(5/6), pages 439-456.
    4. World Bank, 2009. "Geography in Motion: World Development Report 2009 (excerpt)," Transnational Corporations Review, Ottawa United Learning Academy, vol. 1(3), pages 40-46, September.
    5. Sebastian Berger, 2008. "Circular Cumulative Causation (CCC) à la Myrdal and Kapp — Political Institutionalism for Minimizing Social Costs," Journal of Economic Issues, Taylor & Francis Journals, vol. 42(2), pages 357-365, June.
    6. Uphoff, Norman, 1993. "Grassroots organizations and NGOs in rural development: Opportunities with diminishing states and expanding markets," World Development, Elsevier, vol. 21(4), pages 607-622, April.
    7. Caroline Ashley & Simon Maxwell, 2001. "Rethinking Rural Development," Development Policy Review, Overseas Development Institute, vol. 19(4), pages 395-425, December.
    8. Timmer, C. Peter, 1995. "Getting agriculture moving: do markets provide the right signals?," Food Policy, Elsevier, vol. 20(5), pages 455-472, October.
    9. Frank Ellis & Stephen Biggs, 2001. "Evolving Themes in Rural Development 1950s‐2000s," Development Policy Review, Overseas Development Institute, vol. 19(4), pages 437-448, December.
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    Cited by:

    1. Vladislav Valentinov & Lioudmila Chatalova, 2014. "Transaction Costs, Social Costs and Open Systems: Some Common Threads," Systems Research and Behavioral Science, Wiley Blackwell, vol. 31(2), pages 316-326, March.
    2. Valentinov, Vladislav & Vaceková, Gabriela, 2015. "Sustainability of Rural Nonprofit Organizations: Czech Republic and Beyond," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 7(8), pages 9890-9906.
    3. Valentinov, Vladislav & Hielscher, Stefan & Pies, Ingo, 2015. "Nonprofit organizations, institutional economics, and systems thinking," Economic Systems, Elsevier, vol. 39(3), pages 491-501.
    4. Vladislav Valentinov & Gabriela Vaceková, 2015. "Sustainability of Rural Nonprofit Organizations: Czech Republic and Beyond," Sustainability, MDPI, vol. 7(8), pages 1-17, July.
    5. Valentinov, Vladislav, 2015. "From equilibrium to autopoiesis: A Luhmannian reading of Veblenian evolutionary economics," Economic Systems, Elsevier, vol. 39(1), pages 143-155.

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