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

  • Avner Ben-Ner


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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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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  1. A. Mitchell Polinsky & Steven Shavell, 1999. "The Economic Theory of Public Enforcement of Law," NBER Working Papers 6993, National Bureau of Economic Research, Inc.
  2. Glaeser, Edward L. & Shleifer, Andrei, 2001. "Not-for-profit entrepreneurs," Journal of Public Economics, Elsevier, vol. 81(1), pages 99-115, July.
  3. 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.
  4. John Vickers & George Yarrow, 1988. "Privatization: An Economic Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262720116, June.
  5. 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.
  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. 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.
  8. Edward L. Glaeser & Andrei Shleifer, 2001. "The Rise of the Regulatory State," Harvard Institute of Economic Research Working Papers 1934, Harvard - Institute of Economic Research.
  9. 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.
  10. Bilodeau, Marc & Slivinski, Al, 1996. "Volunteering nonprofit entrepreneurial services," Journal of Economic Behavior & Organization, Elsevier, vol. 31(1), pages 117-127, October.
  11. Holmstrom, Bengt & Milgrom, Paul, 1994. "The Firm as an Incentive System," American Economic Review, American Economic Association, vol. 84(4), pages 972-91, September.
  12. Dreze, Jacques H & Hagen, Kare P, 1978. "Choice of Product Quality: Equilibrium and Efficiency," Econometrica, Econometric Society, vol. 46(3), pages 493-513, May.
  13. 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.
  14. 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.
  15. 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.
  16. 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.
  17. William M. Landes & Richard A. Posner, 1974. "The Private Enforcement of Law," NBER Working Papers 0062, National Bureau of Economic Research, Inc.
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