The Relationship Between Public Administration and Third Sector Organizations: Voluntary Failure Theory and Beyond

Abstract Among Lester Salamon’s early theoretical contributions was the introduction of the “Voluntary Failure” concept. In a series of articles published in the second half of the 1980s (Salamon, L. M. 1987a. “Of Market Failure, Voluntary Failure, and Third-Party Government: Toward a Theory of Government-Nonprofit Relations in the Modern Welfare State.” Journal of Voluntary Action Research 16 (1–2): 29–49. Reprinted in Salamon (1995): 33–49, Salamon, L. M. 1987b. “Partners in Public Service: The Scope and Theory of Government-Nonprofit Relations,” In The Nonprofit Sector. A Research Handbook, edited by W. Powell Walter, 99–117. New Haven: Yale University Press, Salamon, L. M. 1989. “The Voluntary Sector and the Future of the Welfare State.” Nonprofit and Voluntary Sector Quarterly 18 (1): 11–24. Reprinted in Salamon (1995): 203–19) Salamon rejects the existing theories concerning the existence and the growth of nonprofit entities, both demand-side theories such as “government failure” (Weisbrod) and “contract failure” (Hansmann) and supply-side theories (James). He introduces the so-called “third-party government” approach underlining the interdependence between the state and various other (profit and nonprofit) social actors (Salamon Lester M. and Toepler S. 2015. “Government–Nonprofit Cooperation: Anomaly or Necessity?” Voluntas 26: 2155–77). The “voluntary failure theory” is based on the recognition of four limits of nonprofit organizations’ action: (a) philanthropic insufficiency; (b) philanthropic particularism; (c) philanthropic paternalism; (d) philanthropic amateurism. These shortcomings can be overcome by the creation of an institutional framework of collaboration between the public administration and the most organized part of civil society, namely the so-called third-sector organizations. The aim of this paper is to open a discussion around the adequacy of the above-mentioned approach to explain the complex configurations that current relationships between public administration and third sector organizations have assumed in Western democracies, especially in the field of welfare policies. We will do so through the analysis of the recent scientific literature on government-nonprofit relationships, with a particular focus on the so-called “new public governance” (Osborne Stephen, P. 2006. “The New Public Governance?” Public Management Review 8 (3): 377–87, Osborne Stephen, P. ed. 2009. The New Public Governance? Emerging Perspectives on the Theory and Practice of Public Governance. London: Routledge) and the co-creation and co-production paradigm (Torfing, J., E. Sørensen., and A. Røiseland. 2016. “Transforming the Public Sector into an Arena for Co-creation: Barriers, Drivers, Benefits, and Ways Forward.” Administration & Society: 1–31), that emphasize the involvement of citizens (i.e. users or clients) and their associations in the definition of the policies, programs, and services directed to them.