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

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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. [1]. For Defourny and Delvetere [2] 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.


  • 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.



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 [3] (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.[4].

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). According to the International Cooperative Alliance (ICA) (20233, 12% of humanity is part of any of the 3 million cooperatives in the world. 280 million people around the world has got a job through a cooperative, I.e. 10% of the world's employed population.

Note :

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



Social enterprises : Matching thematic keyword

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

External glossaries

The Solidarity Economy

Based on the theoretical works like the ones from Polanyi [5] and Mauss [6], the solidarity economy approach , – from an economic point of view --, can be said to be based on the perspective of a plural economy, in which the market is but one of the components, which cannot occult the existence of redistribution and reciprocity. The repartition – their respective weight and form – among these three economic principles – greatly varied throughout history.

The solidarity economy approach stresses the mix of these three principles, plus a link tto the political dimension. The solidarity economy insists on the principle of solidarity, the strong link with the territory and on the close relations between associative action and public authorities. : One of the originalities of the European point of view consists in integrating the initiatives of the civil society in the public space of modern democratic societies. Be it by contributing to the evolution of forms of public regulation. Or it is the rules enacted by public authorities that influence the trajectories of initiatives. But most of all, in the 1980’s – as a consequence of the 1968-76 protests (May 68, Prague, Mexico, Portugal, etc), the political dimension expressed itself in its criticism to consumption and ways of life, totally new questions raised by the social movements by popularizing themes such as the denunciation of the damages caused by neo-liberal capitalism or the re-appropriation of private life and the public space. What became questioned was the very basis of the development model, which everyone had hitherto agreed upon : the ideology of progress.

In South America and in Europe, “solidarity economy” (the translation of "economía solidaria or "de la solidaridad"" or "économie solidaire", etc.) ([7]) expresses itself as a set of thousands of concrete initiatives and experimentations; authors defined it as activities contributing to democratize the economy through citizens’ involvement. Social innovations are observed in proximity services, fair trade, solidarity tourism, organic agriculture, critical consumption and short supply chains, renewable energies, recycling and waste valorization, heritage preservation, microfinance and social currencies, integration through economic activities, …. The democratization of the economy through the proliferation of social innovations is thus linked to the democratization of society .

The conceptual framework of solidarity economy is complementary to "third sector" and "social economy" because it considers these associations and cooperatives not only as organizations but as institutions of civil society with both an economic and a political dimension [8]. Bringing thus the perspective of a transformative economy.



Matching thematic keyword

External glossaries


  1. Solidarity economy in the world, Jean-Louis Laville in...
  2. The Social Economy : The worldwide making of a third sector, Jacques Defourny, Patrick Delvetere,1999
  3. The Social Economy in the European Union – Report by José Luis Monzón & Rafael Chaves, 2012
  4. ibid Laville
  5. Polanyi, K. (1977). The livelihood of man. New York/San Franciso/London: Academic.
  6. , Introduction. Encastrement et nouvelles sociologie économique : de Granovetter à Polanyi et Mauss, Jean-Louis Laville,2019
  7. Solidarity Economy: Key Concepts and Issues,Ethan Miller, 2010
  8. Solidarity Economy International encyclopedia of civil society, UNTFSSE,Jean-Louis Laville, 2022