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The redistributive role of non-profit organizations


  • Cerulli, Giovanni


By starting from the consideration that non-profit organizations cover a significant re-distributive function beside that of governmental agencies, the paper questions why government prefers to finance via transfers private entities likewise lucrative and non-lucrative entities rather than produce these goods directly. By generalizing the Hansmann (1996) theory, we propose a “make or buy” approach in which the choice among three different ownership regimes (governmental, non-profit and for-profit) providing services in public benefit oriented sectors is affected not only by costs reduction (X-efficiency) but also by the level of transfers (degree of “redistribution”) decided at a political level.

Suggested Citation

  • Cerulli, Giovanni, 2006. "The redistributive role of non-profit organizations," MPRA Paper 28, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:28

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    References listed on IDEAS

    1. Fama, Eugene F & Jensen, Michael C, 1983. "Agency Problems and Residual Claims," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 327-349, June.
    2. Giovanni Cerulli, 2006. "Una Matrice di Contabilità Sociale per il welfare mix: l'integrazione del settore non-profit. Prime verifiche empiriche ed effetti occupazionali per l'Italia," Rivista di Politica Economica, SIPI Spa, vol. 96(2), pages 79-128, March-Apr.
    3. Chillemi, Ottorino & Gui, Benedetto, 1991. "Uninformed customers and nonprofit organization : Modelling 'contract failure' theory," Economics Letters, Elsevier, vol. 35(1), pages 5-8, January.
    4. John C. McManus, 1975. "The Costs of Alternative Economic Organizations," Canadian Journal of Economics, Canadian Economics Association, vol. 8(3), pages 334-350, August.
    5. Tobin, James, 1970. "On Limiting the Domain of Inequality," Journal of Law and Economics, University of Chicago Press, vol. 13(2), pages 263-277, October.
    6. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
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    More about this item


    non-profit organizations; redistribution; property rights;

    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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