The
Economic and Social Importance of Nonprofit Organizations
Burton A. Weisbrod
Abstract
This paper focuses on three questions: Why are nonprofit
sectors expanding? What are the effects of this growth on other
parts of the economy? What is the evidence of nonprofits' performance?
It presents evidence of nonprofits' growth in many nations, and
examines the effects of that growth on both the private enterprise
and government sectors, pointing out that while some nonprofit activities
are generating increased competition with these other sectors, some
activities involve cooperation and collaboration with them. Among
the matters examined are: What causes interactions across sectors,
and are interactions increasing? What is the nature of the "gains
from exchange" between taxed and "untaxed" (for-profit and nonprofit)
organizations? Do nonprofit organizations behave differently than
private firms and government agencies, and what is the evidence?
Finally, in light of the quantitative findings on organization behavior,
a number of public policy issues involving the role of the nonprofit
sector are identified.
Burton A. Weisbrod,
Department of Economics, Northwestern University
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