Nonprofit organizations, institutional economics, and systems thinking

Vladislav Valentinov, Stefan Hielscher, Ingo Pies

Research output: Contribution to journalArticle

  • 26 Citations

Abstract

The present paper applies the logic of John Kenneth Gailbraith's institutional economics analysis of corporate power to inquiring into the societal role of the nonprofit sector. Building on Galbraith's insight that corporations cause subtle but pervasive societal imbalances, the paper locates the role of nonprofit organizations in compensating for these imbalances, thus showing corporations and nonprofit organizations to be mutually complementary rather than antagonistic actors. This argument is supported by Niklas Luhmann's vision of the precarious relationship between the complexity and sustainability of social systems as well as by Kenneth Boulding's analysis of the farmer and labor movement. Luhmann's and Boulding's perspectives show profit-seeking corporations to be social systems developing high technological complexity at the cost of sacrificing their societal sustainability, while the improvement of the latter constitutes the rationale of many nonprofit organizations. The same systems-theoretic logic suggests, however, that nonprofit organizations may tend to underestimate the technological complexity of implementing their mission-related activities, thereby undermining their own effectiveness.

LanguageEnglish
Pages491-501
Number of pages11
JournalEconomic Systems
Volume39
Issue number3
DOIs
StatusPublished - 1 Sep 2015

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Nonprofit organization
Systems thinking
Institutional economics
Imbalance
Social systems
Technological complexity
Sustainability
Logic
Farmers
Corporate power
Profit
Labor movement
Economic analysis
Nonprofit sector
Niklas Luhmann
Galbraith
Rationale

Keywords

  • Countervailing power
  • John Kenneth Galbraith
  • Niklas Luhmann
  • Nonprofit organizations

Cite this

Nonprofit organizations, institutional economics, and systems thinking. / Valentinov, Vladislav; Hielscher, Stefan; Pies, Ingo.

In: Economic Systems, Vol. 39, No. 3, 01.09.2015, p. 491-501.

Research output: Contribution to journalArticle

Valentinov, Vladislav ; Hielscher, Stefan ; Pies, Ingo. / Nonprofit organizations, institutional economics, and systems thinking. In: Economic Systems. 2015 ; Vol. 39, No. 3. pp. 491-501
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