Three theoretical approaches - Third sector/Non profit sector; Social Economy; Solidarity Economy

The Third sector (Tiers secteur) or non profit sector

Since the 1980s, there has been a revival of interest in organisations that are neither public nor private for-profit; the most widespread term for them is the “third sector”. The American approach which is dominant internationally in this field, defines this third sector as the sector comprising all non-profit organisations (NPO).

The “non-profit sector” approach is based on the neo-classical economy perspective and apprehends the non-profit organizations through market failures in the provision of individual services and through state failures in the provision of collective services. This approach supposes a separation between these three "sectors" and a hierarchisation among these, the non-profit sector being adopted as a second-rank or third-rank option when the solutions provided by the market and the state prove inadequate.

(…) But such a conception is invalidated by history, associationism having pre-existed public intervention – hence the necessary shift towards conceptions based on other prerequisites, which do not overlook a more than two century-long history in Europe and in the world. In this regard, a more historical perspective allowed to draw two complementary conceptions: the social economy and the solidarity economy. On the theoretical level, the contributions of both heterodox economics and sociology converge to propose the structuring importance of solidarity' and a more open conceptualisation of the interdependence between public action and associative action' present in both concepts. . For Defourny and Delvetere the differences may be summarised as follows: the conceptual centre of gravity of the not-for-profit approach is found in the prohibition of distribution of profits, (...)whereas the concept of the social economy relies heavily on co-operative principles, based primarily on the search for economic democracy.

Note:

• Third sector or non profit sector is still used by researchers as a synonym of social or solidarity economy.
• To know more about the limits of this concept, see both documents in references.

Links

With socioeco.org

You can find documents using the Third sector concept here and "non-profit" (or non profit) here.

The Social Economy

The Social Economy (SE) is historically linked to popular associations and cooperatives. These great families were interlinked expressions of a single impulse: the response of the most vulnerable and defenceless social groups, through self-help organisations, to the new living conditions created by the development of industrial society in the 18th and 19th centuries (see A bit of history)

The social economy recognises some legal forms (co-operatives, mutual societies, associations, and lately, foundations), in which the material interest of investors is subject to limits and gives priority to the setting up of a collective patrimony over the return on individual investment.

In other words, what is stressed in Europe is, at the organizational level, all the legal forms which limit the private appropriation of benefits. At the difference with the Third/Non profit sector North American view, European initiatives share a common tradition, which is specific to them and insists less on the non-distribution constraint, philanthropy and volunteering than on collective actions based on mutual help and participation of the citizens concerned by social problems.

Their characteristics are : service to its members or to the community ahead of profit; autonomous management; a democratic decision-making process; the primacy of people and work over capital in the distribution of revenues (see "Cooperative values and principles" in Cooperatives).

Laville notes that for some authors the social economy includes only those associations which are enterprises. It is thus composed of non-capitalist enterprises, active on the market, and the indicator of success is that of the increase in the volume of market activities. This definition evaluates co-operatives, mutual societies and associations in terms of the evolution of the relations between their members and in terms of their economic results, examined from the point of view of their degree of integration in the market economy. Questions on the internal functioning and the non-market spheres of the economy are occulted..

Social economy organisations and business models are present in different economic sectors and industrial value chains all over the world. In Europe, while the social economy is developed unevenly across EU Member States, its contribution to national GDP can range up to 10% in some Member States (Spain, France, 2017).

Note :

• Social Economy is used in several countries as a synonym of "Social and Solidarity Economy (SSE) (Spain, Romania, etc.).

Links

With socioeco.org

Social enterprises : Matching Socioeco.org thematic keyword

and The Social Economy in the European Union : Matching Socioeco.org thematic keyword