Overall evaluation of economic theories

  • Richard Steinberg

DOI: 10.1007/BF02354194

Cite this article as:
Steinberg, R. Voluntas (1997) 8: 179. doi:10.1007/BF02354194


This article evaluates economic theories of the non-profit sector by their ability to enlighten our understanding of the scope of inquiry, the determinants of the size and scope of the non-profit sector, and the behavioural responses of donors, volunteers, paid staff and non-profit organisations to changes in their external environment. Adherence to a non-distribution constraint has proven to be a useful way of delimiting economic analysis of non-profit organisations, but more attention should be paid to alternatives. Economists have been less successful at developing usable distinctions between voluntary action and exchange. The size and scope of the sector appear to be determined by entrepreneurial supply factors, donations (which in turn are influenced by tax policy, governmental spending, fund-raising, and the quality and mixture of organisational outputs, commercial or charitable), commercial activities, capital supply, the supply of labour (paid and volunteered), the marketability of outputs, and the distribution of consumer characteristics. Variations of James's (1983) model have proven useful to predict the reaction of non-profits to exogenous changes.

Copyright information

© International Society for Third-Sector Research 1997

Authors and Affiliations

  • Richard Steinberg
    • 1
  1. 1.Department of Economics, 516 Cavanagh HallIUPUIIndianapolis

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