In an article published in this journal in 2005, Dorward et al. argued that non-market institutions are particularly effective in addressing market failures in the high-transaction cost institutional environment which is often characteristic of low-income countries. This comment develops additional theoretical underpinnings of this argument by exploring differences in the capacity for addressing market failure of for-profit firms, on the one hand, and third sector organizations representing a major type of non-market institutions, on the other. It is argued that while for-profit firms address market failures by facilitating market exchange, third sector organizations do so by replacing exchange with self-sufficiency. This recourse to self-sufficiency is reflected in the important role of third sector organizations in economic development in low-income countries.