MATCHING PROFIT AND NON‐PROFIT NEEDS: HOW NPOs AND COOPERATIVES CONTRIBUTE TO GROWTH IN TIME OF CRISIS. A QUANTITATIVE APPROACH

Abstract

We propose a microeconomic model aimed at describing, in a dual production process, the interaction between the formal and the informal sector. The adopted framework is characterized by the absence of information asymmetries. The latter assumption is motivated by the focus of the paper, which chooses a cooperative rather than a competitive interaction between the for-profit and not for profit sectors, as the non-profit sector offers services which enable and increase the labour productivity of the workers employed in the for profit sector. Specifically, the non-profit industry can lower the monetary costs of labour by paying a share of wages and dividends in real terms. As a result, at aggregate level, consumption expenditure decreases proportionally to the share of goods and services that are not bought on the market. In this scenario the non-profit sector can play an important role in elaborating a way out of the crisis, by: i) reducing the income inequality between the employed and the unemployed, ii) lowering labour costs, and iii) endowing workers with an alternative source of employment. The theoretical analysis, complemented by empirical evidence built on Italian data collected for the period 2005-2012, shows that the model is not yet applicable in the Italian context as the non-profit industry is growing, but it is still inadequate in size to complement the activities of the for profit sector. However, we claim that Italy should elaborate a way out of the crisis by empowering the Third Sector, and, more in general, a 'good informal economy' made of non-profit institutions. CIRIEC recueillies durant la période 2005-2012, montre que le modèle n'est pas encore applicable dans le contexte italien car le secteurà but non lucratif croît mais n'a pas encore atteint de dimension suffisante pour compléter les activités du secteurà but lucratif. Cependant, les auteurs affirment que l'Italie devrait trouver une issueà la crise en donnant procuration au Tiers Secteur et, plus généralement,à un bon secteuréconomique informel composé d'organisations sans but lucratif.

Partnering with Civil Society Organizations: the role of volunteers and not for profit organizations in the provision of welfare services

“…In the standard perspective, therefore, volunteering is assumed to be a peculiar category of labour with a considerable number of divergent rules and dynamics compared to the standard labour patterns, but still able to provide goods and services to the community as all other categories of labour. Indeed, in most of our previous researches (Viganò and Salustri, 2015;Salustri and Viganò, 2017;Salustri and Viganò, 2018), we also considered volunteering and the third sector as instruments to achieve goals of economic interest. Specifically, we defined the third sector as a capability-enhancing workplace, i.e., a social environment able to improve the conversion factors that allow individuals to turn goods and services into functionings (Kuklys, 2005;Kuklys and Robeyns, 2005;Robeyns, 2005).…”

Modelling Social Enterprises

“…The NPOs' literature offers several theoretical models that describe NPOs (Viganò and Salustri 2015) and non-profit hospitals (Wedig et al 1988). One of the models proposed by Malani et al (2003) defines a general framework of NPOs and POs, which in fact is a profit maximization model.…”

Structure and performance of Italian cooperatives: a quantitative analysis based on combined use of official data

“…Though the results do not always match, these attempts have served to increase interest in evaluating the specific role and economic and occupational importance of cooperatives in Italy. This interest has been reinforced by the recent economic crisis, which has highlighted that, in order to identify strategies that can put Italy on a pathway to growth, it is necessary to carefully evaluate the contribution that may derive not only from each institutional sector or public or private institution, but also from specific types of enterprises (Viganò and Salustri, 2015). The opportunity thus arose to go beyond the classification of economic and employment variables by institutional sector and by companies in "non-financial corporations" and "financial companies", and to give particular attention to the plurality of forms of enterprise and the nature of different business owners and their interests.…”