Working paper 03/074 - Abstract

The Role of Donated Labour and Not for Profit at the Public/Private Interface (PDF, file 93.1 KB) (PDF, 93kB)

Paul A Grout and Michelle J Yong

The aim of this paper is to assess the role of donated labour and not-for-profit (NFP) entities at the public private interface. After discussing what a NFP enterprise is and providing general background, we look at the underlying theory of NFP institutions. The fact that NFP companies are able to precommit themselves not to expropriate donated labour is identified as a primary justification of the NFP model and we emphasise the role that purchasers play in the expropriation problem and suggest that this is a particular concern for institutions at the public private interface. After summarising the empirical literature we provide a brief case study of Glas Cymru and show that it is likely to fall foul of the purchaser problems in that the structure makes it hard to avoid expropriation of donated labour. Although there is limited empirical evidence investigation of what is available suggests that the shift from FP to NFP has had no significant effect on the company. Finally, we address the issue of Foundation Hospitals and suggest that there is more, albeit limited, reason to suggest that the NFP status will prove beneficial for donating labour.

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