The redistributive role of non-profit organizations

Abstract

By starting from the consideration that non-profit organizations cover a significant re-distributive function beside that of governmental agencies, the paper questions why government prefers to finance via transfers private entities likewise lucrative and non-lucrative entities rather than produce these goods directly. By generalizing the Hansmann (1996) theory, we propose a “make or buy” approach in which the choice among three different ownership regimes (governmental, non-profit and for-profit) providing services in public benefit oriented sectors is affected not only by costs reduction (X-efficiency) but also by the level of transfers (degree of “redistribution”) decided at a political level.non-profit organizations; redistribution; property rights