Size and Development of the Third Sector: An Insight Into Cross-Country Differences

Abstract

Non-profit or third sector is a very diverse sector and its socio-economic importance is rising in modern societies, although the way in which this sector is operating is changing dramatically, causing that dividing lines with for-profit and government sector are blurring. Nevertheless, quite substantial differences can be observed in the development and relative size of non-profit sector across countries, several factors potentially contributing to those differences. Consequently, the purpose of the paper is to theoretically and empirically investigate the effect of governmental interventionism, level of economic development and extent of societal heterogeneity on the variations in the size of the non-profit sector across countries, since theory predicts certain macro relations between those variables. Furthermore, the paper tries to address certain limitation and pitfalls of the development of non-profit sector in the future, predominantly related to increased pressures for commercialisation and performance orientation.