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Non-Profit Organizations in a Bureaucratic Environment

  • Paul Grout

    (University of Bristol, Department of Economics)

  • Wendelin Schnedler

    ()

    (University of Heidelberg, Department of Economics)

How does the environment of an organization influence whether workers voluntarily provide effort? We study the power relationship between a non-profit unit (e.g. university department, NGO, health trust), where workers care about the result of their work, and a bu- reaucrat, who supplies some input to the non-profit unit, but has opportunity costs in doing so (e.g. Dean of faculty, corrupt representative, government agency). We find that marginal changes in the balance of power eventually have dramatic effects on donated labor. We also identify when strengthening the non-profit unit decreases and when it increases donated labor.

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File URL: http://www.uni-heidelberg.de/md/awi/forschung/dp474.pdf
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Paper provided by University of Heidelberg, Department of Economics in its series Working Papers with number 0474.

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Length: 36 pages
Date of creation: Sep 2008
Date of revision: Sep 2008
Handle: RePEc:awi:wpaper:0474
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  9. David Easley & Maureen O'Hara, 1983. "The Economic Role of the Nonprofit Firm," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 531-538, Autumn.
  10. Sliwka, Dirk, 2003. "On the Hidden Costs of Incentive Schemes," IZA Discussion Papers 844, Institute for the Study of Labor (IZA).
  11. Marisa Ratto & Wendelin Schnedler, 2008. "Too Few Cooks Spoil the Broth: Division of Labour and Directed Production," Working Papers 0468, University of Heidelberg, Department of Economics, revised Jul 2008.
  12. Marisa Ratto & Wendelin Schnedler, 2003. "Too few cooks spoil the broth," The Centre for Market and Public Organisation 03/090, Department of Economics, University of Bristol, UK.
  13. Tim Besley & Maitreesh Ghatak, 2005. "Competition and incentives with motivated agents," LSE Research Online Documents on Economics 928, London School of Economics and Political Science, LSE Library.
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  17. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
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