In the article, we analyse the impact of changing policy environments on the development of the third sector in Europe. Based on the results of systematic comparative research in eight European countries

Purpose – The context conditions for third sector organizations (TSOs) in Europe have significantly changed as a result of the global economic crisis, including decreasing levels of public funding and changing modes of relations with the state. The effect of economic recession, however, varies across Europe. The purpose of this paper is to understand why this is the case. It analyses the impact of economic recession and related policy changes on third sector development in Europe. The economic effects on TSOs are thereby placed into a broader context of changing third sector policies and welfare state restructuring. Design/methodology/approach – The paper focusses on two research questions: how has the changing policy environment affected the development of the third sector? And what kind of strategies have TSOs adopted to respond to these changes? The paper first investigates general trends in Europe, based on a conceptual model that focusses on economic recession and austerity policies with regard to the third sector. In a second step of analysis, the paper provides five country case studies that exemplify policy changes and responses from the third sector in France, Germany, the Netherlands, Poland and Spain. Findings – The paper argues that three different development paths can be identified across Europe. In some countries (France and Spain), TSOs face a strong effect of economic recession. In other countries (Germany and Poland) the development of the third sector remains largely stable, albeit at different levels, whereas in the Netherlands, TSOs rather experience changes in the policy environment than a direct impact of economic decline. The paper also shows that response strategies of the third sector in Europe depend on the context conditions. The paper is based on the European project “Third Sector Impact.” It combines an analysis of statistical information with qualitative data from interviews with third sector representatives. Originality/value – The paper contributes to our understanding of the interrelation between economic recession, long-term policy changes and third sector development in Europe.

Third-sector organizations (TSOs) in Europe have been confronted with profound changes to their regulatory and societal environments. By applying the concepts of “organizational paradoxes” and “governance,” we analyze how TSOs have adjusted their governance as a response to these environmental challenges. Based on organizational case studies in France, Germany, and the Netherlands, we argue that TSOs have found multiple ways to address tensions at the organizational level, for example, by mobilizing and combining resources, re-arranging their organizational governance and by adopting new legal forms. These changes have resulted in hybridization and increased organizational complexity that might translate into the emergence of new paradoxes at the organizational level. Therefore, dealing with paradoxes constitutes an ongoing process for TSOs that goes beyond incremental adjustments.

This article investigates responses to EU public procurement directives in Norway, England and Germany, with a particular focus on health and social services. We used a comparative national patterns approach to analyse parliamentary debates, consultative statements, the media and interviews with stakeholders. The literature contains prominent arguments suggesting that health and social service governance regimes are converging on the liberal model. Some authors argue that with its focus on policies which create markets, the EU is a driving force with an increasing relevance for market-based governance practices. However, the role of EU legislation is unclear as procurement regimes in relation to the governance of health and social services constitute a highly ambiguous terrain. Our study enabled us to show that the form of the debate is highly dependent on path-dependent mechanisms and the degree of openness of the national political system that provides channels for interests to be articulated. Indeed, the Norwegian case study serves as an excellent example of why marketisation has not advanced to the degree predicted in the literature: an inclusive and open political system and a strong non-profit health and service sector meant that the non-profit groups managed to turn the debate in their favour.

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