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Voluntas: International Journal of Voluntary and Nonprofit Organizations, Vol. 11, No. 1, 2000
Three trends since the 1960s underscore the need for different ways of conceptu-
alizing the new mixed economy in the human services. First, there has been an
enormous increase in the number and types of nonprofit organizations, and greater
dependence on governmental revenue. Second, extensive growth in privatization
and commercialization in the human services. Third, this culminated in the con-
vergence and blurring of sectoral boundaries. Numerous metaphors have been
suggested to describe these new patterns, but more suitable concepts and theories
are needed. Four theoretical frameworks are analyzed for an intersectoral study of
organizations in the same industry: (1) political economy, (2) organizational ecol-
ogy, (3) neoinstitutionalism, and (4) mixed, open systems. As analytic paradigms,
these frameworks could supplement, complement, or be integrated with other re-
search models for third sector studies, and could contribute to theory building and
social policy.
KEY WORDS: sectoral convergence; research models; form of ownership.
INTRODUCTION
1
0957-8765/00/0300-0001$18.00/1 °
C 2000 International Society for Third-Sector Research and The Johns Hopkins University
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2 Kramer
Three almost parallel trends have emerged since the 1960s underscoring the
need for new approaches to the study of the expanding organizational universe
in the human services. First, a takeoff has occurred in the exponential growth
in the number and types of nonprofits, and their rapid and extensive dependence
on governmental funding to support their substantial role in implementing public
policy. Before the decline in federal funding beginning in the decade of the 1980s,
governmental organizations on all levels were the source of three times as much
revenue for nonprofit social service agencies as they received from their traditional
philanthropic sources, which dropped from 18 to 11% of their income (Salamon,
1993). By the mid-1980s, the human services industry was a major factor in the
political economy of the postindustrial society in the United States.
A parallel development was the recognition of a new entity, the third sector,
embodied since 1980 in the Independent Sector, the national professional and trade
association for over 1,400,000 nonprofit organizations (NPO)—up from about
50,000 in the late 1940s—representing more than 25 different types of tax exempt
organizations. The Independent Sector represents “. . . an effort to institutionalize
the idea that all charitable tax exempt organizations were part of a distinctive
and coherent domain of organizations—to, in effect, invent the nonprofit sector”
(Alford, 1992; Hall, 1992, p. 244).
A similar process has been underway in over sixty countries worldwide, and
is reflected in a substantial body of international research, the establishment of
over forty academic research centers in less than twenty years, the founding of
new scholarly journals, and the professional associations of ISTR and ARNOVA
(Gidron, Kramer, and Salamon, 1992, pp. 1–30).
The first efforts to account for the development and character of a third, or
nonprofit, sector were made by economists using neo-classical concepts of state
or market “failure,” or “trust,” as explanatory variables (Hansmann, 1987, 1996;
Ortmann, 1996; Steinberg, 1997). These macro-economic models failed, however,
to capture the critical dimensions of the third sector beyond some imputed compen-
satory functions. They also did not explain cross-national variations in the size and
composition of the third sector (Di Maggio and Anheier, 1990; Lifset, 1989, 141–
149). They have also been faulted by Hall (1998) for their reductiveness, empirical
weaknesses, conceptual circularity, and ethical obtuseness (see also VOLUNTAS,
8(2), Special Issue on Economic Theory, pp. 97–119).
More recently, Salamon and Anheier (1998) proposed a more comprehensive
“theory of social origins” to explain how a set of historical, political, and economic
variables can account for the differences in the size, composition, and funding
patterns of the nonprofit sectors in eight countries.
The second trend, occurring at the same time, has been a parallel growth in
various forms of privatization of many governmental functions, and, beginning in
the 1980s, rapid growth in commercialization and competition in fields formerly
dominated by nonprofit organizations in health care, education, and the social
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services (Adams and Perlmutter, 1991; Tuckman, 1998). Many nonprofits also
sought to compensate for the loss of revenue from government during the 1980s by
means of fees, sale of services, and other forms of income replacement, including
their conversion, in whole or in part, to for-profit status (Ryan, 1998; Salamon,
1993, 1998; Skloot, 1988). New structural forms have proliferated in which hybrid
or pseudo nonprofits have spun-off commercial subsidiaries (McGovern, 1989;
Scotchmer and van Benschoten, 1999). At the same time, numerous business and
industrial corporations have converted to nonprofit or have established nonprofit
subsidiaries (Claxton, et al., 1997; Gray, 1997; Kuttner, 1997; Weisbrod, 1998).
Although nonprofits still have about two-thirds of the market for health care,
for-profit companies captured almost all the growth in hospital and home healthcare
during 1977–96, as well as expanding their share of the social services market in
child welfare, including day care, and drug treatment (Clarke and Estes, 1992;
Geen and Pollak, 1999). In higher education, it is estimated that by the mid-90s,
at least two-thirds of the income of private colleges and universities, together
with philanthropic foundations, was derived from fees and other revenue from
commercial activities of close to a billion dollars (Hodgkinson and Weitzman,
1996; see also Weisbrod (ed.), 1998).
The third trend is that these processes of expansion and commercialization
have contributed to the recent but less recognized societal trend toward convergence
and blurring of sectoral boundaries in a new “mixed social economy,” a term
currently used in both the United States and Europe (Ferris and Graddy, 1999;
Knapp, Beecham, and Hallam, 1997). It reflects the fact that “. . . the borders that
once tidily separated governmental, for profit and nonprofit institutions are quickly
vanishing” (Hammack and Young, 1993, p. xiii). This blurring of sectoral borders
is not surprising because most social services are, or could be, provided by any
type of organization, particularly if there is an administrative separation between
public funding and service delivery (Billis, 1993; Kramer, 1995). As predicted
over a decade ago, “the future of the welfare state is the invention of institutions
that are not public and not private” (Rein, 1989, p. 70).
Despite these changes, there has been a tendency to reify the “guiding con-
struct” of the third sector so that it takes on more substance and coherence
(Abzug, 1999; Alford, 1992). Forgotten is the fact that, historically, the shifting
boundaries—conceptual, legal, political, economic and organizational—between
societal sectors have always been blurred, permeable, and interpenetrated (Brody,
1996a; Musolf and Seidman, 1980; Young, 1999). Other factors contributing to
the lessening of differences in the structure, roles, and performance of organiza-
tions are their increasing dependence on the same funding sources, public policies,
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4 Kramer
and regulations, as well as the diffusion of a common set of principles of the “new
managerialism” across sectoral lines (Bielefeld and Galaskowicz, 1998; Ferris and
Graddy, 1989; Locke, 1996).
From an international perspective, it was observed almost 15 years ago in
Europe that “There is a growing interdependency of both public and private actors
in economic and social policy that renders meaningless the old distinctions of ‘state
and society’ or of ‘public and private’ as separate domains” (Kaufmann, 1991,
p. 91; see also Kuhnle and Selle, 1992; Perry and Rainey, 1988). In the United
States, “The interpenetration of sectors is an established fact. The epistemolog-
ical problem is to devise methods that will enable us to grasp its extent and its
significance” (Hall, 1992, pp. 105–106).
Evidence of a pervasive societal trend toward institutional isomorphism,
through acculturation, assimilation, or imitation, is found in the proliferation of
the neologisms coined during the last 25 years. They reflect both the diminishing
significance of form of ownership, as well as the absence of more appropriate con-
cepts for a mixed, intersectoral network of organizations (Smith, 1975). Included
in this conceptual jungle, which has superseded the traditional public/private di-
chotomy, are as follows: the contract state, the enabling state, the shadow state,
welfare pluralism, the mixed, or new political economy, third party government,
and indirect public administration. These, in turn, have been seen as the outcome
of a phenomenon called “blurred boundaries,” which have also been described as
ambiguous, fuzzy, fading, dissolving, blending, merging, shifting, eroding, disap-
pearing, or overlapping (Ferris and Graddy, 1996; Kramer, 1998). They are also
embodied in an earlier metaphor used in public administration describing these
social processes as the shift from a layer to a marble cake (Grodzins, 1966).
While Hall (1992, p. 28) declared that “the sector is an artificial construct,
not an institutional reality,” Alford (1992, p. 42) noted the “symbolic function of
the political language used to lump together highly disparate organizational forms
with quite different societal roles and links to economic and political interests.”
Others have questioned whether “. . . the idea of ‘sector’ . . . is the most useful way
of making sense of the diversity of organizations in this field . . . in an increasingly
fragmented world . . . it is possible that social purposes will be served through
alliances and networks as through the notion of separate sectors” (Taylor, 1992;
Taylor and Lansley, 1992, p. 23).
Although there have been very few empirical, intersectoral studies of the
convergence and erosion of boundaries, numerous sociological explanations for
these trends have been proposed. Concepts have been borrowed from network,
ecological, exchange, open systems, coalition, contingency, resource dependency,
and even postmodern theories (Boje, Gephart, and Thatchenkery, 1996; Gronbjerg,
1993, pp. 309–310; Hatch, 1996; Powell, 1990). Among the independent variables
suggested for comparative intersectoral studies of organizational role and per-
formance in different industries are size, age, structure, fiscal resource systems,
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perspectives (Milofsky, 1996; Reitan, 1998, p. 286). Accordingly, in the next sec-
tion, four current theoretical frameworks are analyzed and evaluated: (1) political
economy, (2) organizational ecology, (3) neoinstitutionalism, and (4) mixed, open
systems. Each could, in varying degree, serve as a set of lenses through which or-
ganizations from different sectors in the same industry or field of service could be
studied. As exemplars, they constitute a selective menu of four analytic paradigms
that focus on the organization as a whole, on internal structures and processes, and
on external relations. They need not displace current third sector research models;
rather, as a response to the convergence and blurring of sectoral boundaries, they
can supplement or complement single sector studies.
8 Kramer
10 Kramer
change is likely. Under these conditions, the basic assumption is that biotic and
organizational populations will behave in similar ways; hence, the focus is on large
populations of organizations from all sectors, rather than on only one.
Typically, ecological studies seek to identify the life cycle regularities that
shape the birth, mortality, and change rates of a variety of organization populations
that are internally homogeneous over long time spans. Curiously, in these studies,
there seem to be relatively few inclusions of the state’s role, or of ideological,
political, or economic influences on the life cycle of organizations. An exception
is Gronbjerg’s (1993) intensive study of 13 Chicago social service and commu-
nity development organizations. Her research showed how change occurred very
slowly and rarely in major ways, illustrating a key tenet of ecological theory:
once relationships with the environment are established, organizational structures
persist with few modifications in their basic character.
Social scientists have analyzed the rates of founding and dissolution of pop-
ulations of organizations, such as national labor unions, newspapers, phone com-
panies, wineries, and social movements over long periods of time, as well as the
founding, change, and dissolution rates in other mixed industries. One of the few
studies of the life cycle of a cohort of 451 nonprofit social service agencies in
Toronto from 1970–82—despite the relatively short time span—also illustrates
characteristic features of an ecological perspective and its assumption of simi-
larity between biotic and organizational behavior (Tucker, 1988). At the same
time, these researchers acknowledged that institutional forces, such as the state,
may be much more important than ecological forces in understanding the rates
of founding and disbanding of human service organizations (Hasenfeld, 1992,
pp. 38–39).
Based on an extensive body of empirical research, and the metaphor of bio-
logical evolution, four major social processes that affect long-term changes in pop-
ulations of organizations have been studied: (1) competition for funds, members,
and other resources; (2) legitimacy; (3) aging; and (4) environmental abundance
or constraints (Hannan and Freeman, 1989, pp. 13–14).
The particular mix of auspices within a population of organizations is, of
course, different in different countries and varies over time in response to political,
cultural, economic, and technological factors. The mix also varies within different
industries and within the nonprofit segments of particular industries. Historical
and societal forces (political, technological, and cultural) are invoked to explain
the particular mixes in a population of organizations and within industries. For
example, many of the important niches for nonprofit organizations in religion,
advocacy, and in the provision of educational, health, and social services under
sectarian auspices are the result of the historical separation of church and state in
the United States, as well as constitutional restrictions on the role of government.
Similarly, contributing to the continuity of many other nonprofit niches for
over a century has been the social policy of separating public funding from service
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12 Kramer
From the mid-1970s through the 1980s, a growing number of social scientists
(Boulding (1973), Bruyn (1977), Perry and Rainey (1988), and Sharkansky (1979))
rejected the static public-private dichotomy, and increasingly referred, in a variety
of ways, to the blurring of boundaries between the sectors. An even earlier advocate
of similar views was Bruce L. R. Smith in his analysis in 1975 of the “new political
economy”—subsequently dubbed by Lester M. Salamon a decade later as “third
party government”—who declared: “So great is the interpenetration between the
‘public’ and the ‘private’ sectors, that this basic distinction—on which the political
rhetoric and dialogue of modern times has rested—has ceased to be an operational
way of understanding reality” (cited in Van Til, 1988, p. 95).
This blurring of sectoral boundaries usually has been regarded either as a cause
or as the effect of a process of structural isomorphism in which nonprofit organiza-
tions have become increasingly bureaucratized, professionalized, and commercial.
To Van Til, prevailing conceptions of the nonprofit sector could not explain this
process in American society, and it became part of his formulation of the “social
economy” as the broad, societal context for all forms of voluntary action (Van Til,
1988, p. 167).
In a subsequent discussion of some of the same issues, Van Til (1994) adopted
a holistic approach in describing nonprofit organizations as a social institution
surrounded and influenced by other institutions within an environment in which the
major elements consist of the following: givers, intermediaries (foundations, trade
associations, university-based research centers, regulators, monitors, etc.), other
nonprofit and charitable organizations, and their beneficiaries (clients, members,
staff, and customers).
This conception represents Van Til’s linkage to one of the few applications of
institutionalism to nonprofit organizations, and its subsequent development evident
in the paradigmatic volume edited by Powell and DiMaggio (1991). In the social
science literature, the concept of institutions has been used with an enormous array
of meanings, many of which could be summed up in an over-simplified way as a
concern with the three R’s: rules or routines, roles, and relationships; all of which
are socially constructed abstractions, rather than expressed in individual behaviors
or the informal structures of organizations.
Because of its centrality in the social sciences, each discipline has its own
version of institutions. While not necessarily the products of conscious design, in-
stitutions reflect the interconnections between the polity, the economy, and society
from a distinctive, taken-for-granted perspective (Meyer and Rowan, 1991, p. 8).
Beginning in the 1970s, an extensive body of empirical research has been
published by social scientists identified with a “new” institutionalism, much of
which builds on older forms of this intellectual tradition (DiMaggio and Anheier,
1991; Lowndes, 1996; Scott, 1995; and Selznick, 1996). Case and industry studies
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using this framework have been made of art museums, colleges and universities,
social service organizations, banks, newspapers, commodity markets, corporate
philanthropy, hospitals, schools, law firms, textbook publishers, and professional
organizations, among many others.
Gronbjerg’s 1993 Chicago study, cited earlier, could also be included as one of
the few examples of an open systems and intersectoral approach to the institutional
environment. Using concepts from ecological, contingency, resource dependency,
and institutional theory, Gronbjerg analyzed the diverse factors influencing the
structure and types of funding relations in the social services and community de-
velopment. Patterns of intersectoral dependence, competition, and collaboration
were found to be shaped by organizational reputations and resources, governmen-
tal regulations, and strategic adaptations to the changing funding environment.
Differences in the external environment of different types of nonprofits also took
on an institutionalized form, varying by the specific culture of populations of
organizations (Zucker, 1988).
In another urban research project, neoinstitutional concepts were applied by
Feeney (1996) to a case study of five nonprofit organizations confronting man-
agement problems. As an alternative to the traditional rational-bureaucratic model
of organization, institutional analysis was utilized as a more effective means of
identifying the distinctive character of nonprofit solutions to their management
problems. Similar to an ethnographic approach with its integrated picture of inter-
nal and external organizational behavior, the nonprofits were viewed as embedded
in larger organizational and community systems, together with various stakehold-
ers, in an environment that included both vertical and horizontal interorganizational
networks. When analyzed as social systems rather than as rational bureaucracies,
various cultural factors that shape organizational behavior could be taken into ac-
count. These factors included the ethnic or religious groups among constituencies
and the constraints and demands of funders, regulators, and members on all levels,
many of which had a coercive or constraining effect.
The value of this form of institutional analysis is akin to a set of tools to decode
complex and dynamic environments, mapping not only organizations, but different
layers of interpretation and interplay between internal and external factors in the
organization and the system. Multiple constitutencies or stakeholders, including
the governing body, can be analyzed with their different and often conflicting
cultures, values and role requirements, elements usually missing in a standard
organizational analysis.
Some principles of institutional behavior that have been derived from these
and other empirical studies are as follows: institutions persist even though they
may be less than optimal if maintained by ideology and the state; there is a strik-
ing homogeneity of arrangements in labor markets, states and corporations in
their taken-for-granted expectations and self-sustaining processes; regardless of
their form of ownership, most organizations tend to respond in a similar manner to
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14 Kramer
similar problems; structures and performance are shaped by vertical and interorga-
nizational networks for funding, goal setting, and regulations; regulatory processes
vary widely in different fields such as medical care and civil aviation reflecting
differences in the political, economic and organizational arrangements; the key
sources of institutionalized rules in modern society are the state, the professions
and their distinctive myths and ceremonies, public opinion, and the network of
organizations comprising an industry.
In general, therefore, institutional forces tend to shape organizational struc-
tures and practices, including the larger interorganizational systems—both locally
and nationally—in which they are embedded. Typically, many of the interorganiza-
tional studies of institutionalization have been based on the macro or societal level.
Institutional analysis, however, is not meant to supplant other approaches
to understanding organizational behavior; rather, it is more of an integrating ap-
proach that can better explain nonprofit organizations in their larger contextual and
operating environments. This feature is particularly useful because organizations
exist in social systems where their behavior is shaped by cultural influences, by a
variety of constituencies, and by coercive factors in their environment.
Underlying all of these paradigms is the basic assumption that the form of
ownership is less important than the institutional and ecological structure of a par-
ticular industry where the extent of competition and isomorphism would be more
influential (DiMaggio and Anheier, 1990). In many respects, neoinstitutionalism
is similar to political economy in not constituting a single or even a coherent body
of theory; rather, it contains a variety of perspectives, some complementary, while
others may conflict. These different versions reflect the varying significance of
formal and informal structures, change and stability, and the role of rationality and
norm-governing behavior in creating and sustaining institutions (Lowndes, 1996).
Studies using this approach, however, have been criticized for downplay-
ing the existence of change and conflict in institutional behavior, and the role of
individuals, while overemphasizing the extent of institutionalization, determin-
ism, and organizational isomorphism (Reiten, 1998, pp. 298–299). Nevertheless,
neoinstitutionalism can also serve as a source of concepts, theories, and empirical
studies relevant for a systemic or intersectoral view of the human services or any of
its components. Alone or in combination with political economy or organizational
ecology, its eclecticism and interdisciplinary character is also congruent with many
of the constituent elements of the third sector.
particularly on services to the elderly, have had considerable influence in the United
Nations European Region, their work is not widely known in the United States.
Evers’ publications (1991, 1993, 1995) fortunately provide an accessible overview
of some of the leading ideas underlying this model, and it can be regarded as an
exemplar.
In discussing the goal of establishing a pluralist welfare state, the Commission
for Social Development of the United Nation’s Economic and Social Council, used
the concept of the welfare mix as its key organizing principle (Evers and Svetlik,
1993, pp. 220–221). In this Statement, human welfare is regarded as the outcome
of the complex interactions between four complementary sectors in society: state,
market economy, the civil society of voluntary organizations, and the community
of households. Overall welfare is generated in various combinations by all four of
these societal sectors, which need to be considered in planning, organizing, and
evaluating a pluralist welfare mix. These basic ideas are similar to the concepts of
the task environment and social economy employed in two of the other alternative
paradigms of political economy and the new institutionalism.
Because they are involved in the whole range of welfare services, nongovern-
mental or nonprofit organizations are regarded as part of an intermediate area (my
italics) “a dimension of the public space in civil societies, . . . rather than a clear
cut sector. It is within this intermediate area that organizations relate in one way
or another to all other sectors . . . (acting as) multifunctional organizations whose
social and political roles may be as important as their delivery of services” (Evers,
1995, p. 159). This intermediary area also includes many hybrid organizations that
intermesh resources and rationales from government, markets, and the informal
sphere of families, networks, and community organizations. Thus, it is within a
mixed economy that includes this intermediary area, where flexible, permeable
boundaries exist, linking the formal and informal, professionals and volunteers,
governmental and voluntary organizations.
In presenting this theoretical framework, Evers sought to distinguish his ver-
sion of the mixed economy of welfare from welfare pluralism as it emerged in
British social policy in the last thirty years. He draws on the current revival of the
19th century idea of the civil society, which includes nonprofits and other types
of organizations and associations, together constituting a mixed welfare regime.
While Evers tends to minimize the significance of the nonprofit/for profit dis-
tinction, it is not on the basis of the increased commercialization of the nonprofit
sector. Instead, organizational size, among other variables, is regarded as a more
salient differential than nonprofit-ness, at least in Europe (Evers, 1991, pp. 167–
168). In addition, exclusion of the informal sphere and the neglect of quasi-formal
organizations at the community level are regarded as serious deficiencies of the
U.S.-led debates on the third sector (Evers, 1995, p. 170).
In evaluating the core concept of the welfare mix, Evers proposed four policy
and research functions: (1) as an analytical, historical, and sociopolitical approach
to the sources of responsibility for welfare problems, not all of which necessarily
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16 Kramer
involve the state, and as a reminder of the changing welfare mixes; (2) as a de-
scriptive tool for identifying the empirical advantages and disadvantages of var-
ious organizational combinations in different countries and their historical roles
in each sector; (3) for evaluation of the potentials and limits of different organi-
zational forms and how they can be combined. For example, while government is
best for equity and uniformity, it is slow in responding to specific needs, or, while
nonprofits are sensitive to the needs of cultural-social subgroups, they are usually
ineffective in reducing regional inequalities; and (4) as an expression of different
political concepts in social policy, such as the changing responsibility between dif-
ferent actors in the social service sector, and in the formal and informal production
and delivery of social services ([Evers and Svetlik?, 1993, pp. 1–50]).
Presumably, another advantage of the welfare mix concept is the avoidance
of ideological bias and the stereotype of a public-private dichotomy. Because of its
flexibility in the selection of variables for study, mixed, open systems are similar in
this respect to the political economy framework. This leads to the conclusion that
studying an organizational universe in terms of the conventional sectors would
be less useful than a more comprehensive, pluralistic, and synergistic approach
that would include the cultural context, particularly for comparative studies. As
an example, governmental support of nonprofits makes sense in the United States,
but in Germany, and to a lesser extent in Norway, nonprofits simply reproduce
the conformity of state-based rules and a rigid professionalism (Evers and Svetlik,
1993, p. 25).
Despite some of its ambiguity, this European conceptualization of a mixed
economy of welfare has been applied productively in extensive research on services
to the elderly (for example, see Evers and Sverlik, 1993); hence, its usefulness in
revealing some of the problems in developing alternatives to a traditional sectoral
view of organizations. By “de-throning” third sector organizations and redefining
them as an intermediary sphere, the schema directs attention to the mixed and inter-
dependent auspices of organizational networks in the society and in a community.
The following six distinguishing features can be identified:
Between the state and the economy, a third sector evolved during the 1980s as
a new subject of social policy. Originating in the changing economic and political
conditions associated with the “crisis of the welfare state,” an enormous increase
in the number and types of nonprofits began in the 1970s in more than 60 countries,
and a takeoff in their utilization and funding by governments to implement public
policy. Within a few years, a parallel growth in privatization and commercialization
occurred, mainly during the 1980s, in fields formerly dominated by nonprofits who
faced increasing competition and declining governmental support.
The most recent trend is the convergence and blurring of lines between the
sectors, resulting in the emergence of two contrasting perspectives. The dominant
and prevailing one celebrates the rapid institutionalization of the third sector as a
primary partner with government in the delivery of services, and as an advocate and
core of the civil society. The other view is skeptical about the validity of a sectoral
model based on type of ownership in the face of a convergence of boundaries and
extensive interdependence.
Although it is widely believed that legal form is one of the most important
determinants of organizational performance, little empirical evidence supports
the belief that the type of ownership can account for the major differences in
the same industry where nonprofit and for-profit organizations exist. Most of the
research findings are at best equivocal, with costs and quality varying with the
industry, time, context, and scale (Kamerman and Kahn, 1989, pp. 34–35). Where
significant differences have been found in the performance of organizations from
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18 Kramer
different sectors, they can be more reliably explained by variables in the external
and internal environment rather than by the form of ownership. Among the most
likely would be size, age, competition, supply and demand, and service technology.
The form of ownership (i.e., its auspices) may, however, influence organizational
behavior by serving as an incentive for administration and staff, by the perception of
users/clientele, and as the basis of treatment by regulatory bodies (Weisbrod, 1998).
Because more suitable concepts and theories for these new patterns of in-
terorganizational relations in the human services industry are missing, there is a
need to develop more appropriate analytic paradigms for a mixed economy where
sectoral lines may have less significance. While not necessarily designed to sup-
plant other research models based on the nonprofit form, a group of four current
theoretical frameworks were analyzed: political economy, organizational ecology,
neoinstitutionalism, and mixed, open systems.
When evaluated according to criteria based upon the organization as a whole
in relation to its environment, as well as its internal structures for decision making,
service delivery, and change (Hasenfeld, 1983, p. 43), each of the four paradigms
could, in varying degree, contribute to the reconceptualization of a mixed-sector,
organizational universe in the human services industry.
In practice, ecological and institutional concepts and theories have been uti-
lized more extensively than those from political economy or open systems, al-
though very few of these studies have included nonprofits. A major exception is
the work of Austin, who developed an exemplary, comprehensive political econ-
omy model for the human services that deserves greater recognition and utiliza-
tion. At the same time, it should be acknowledged that its considerable breadth
and depth and its high level of abstraction, formidable scope, and complexity may
have discouraged its use even on an intra-industry basis. While there is already
a considerable body of research on different aspects of the human services, uti-
lization of a political economy framework could be used productively in studying
specific industries (Austin, 1988, pp. 240–244).
Concepts derived from political economy are particularly well-suited to study
the various strategies used by organizations to obtain resources that influence the
character of their service delivery systems. Because of the importance of power in
organizational behavior, political economy concepts can help reveal the distinctive
ways in which various external and internal interest groups compete and otherwise
influence the resources that enable organizations to strive toward their goals. As a
model, it is adaptable to studies of a single organization, to an industry, or to its
components.
Perhaps because organization theory has had relatively little to say about ori-
gins and dissolution, concepts derived from ecology have been used to study a wide
variety of organizational populations on an intersectoral and a macro-perspective.
Employing a technical and specialized methodology with a specific concentration
on birth, death, and change processes, organizational ecology is particularly ap-
propriate for use in studying external environments that are relatively stable, or
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