The German Gemeinwirtschaftslehre: Implications for modern nonprofit economics

Authors


Vladislav Valentinov, Leibniz Institute of Agricultural Development in Central and Eastern Europe, Theodor-Lieser-Str. 2, D-06120 Halle (Saale), Germany. Email: valentinov@iamo.de

Abstract

This article examines the way modern nonprofit economics can be informed by the Gemeinwirtschaftslehre, a strand of public and nonprofit economics that was popular in German-speaking countries until the 1980s. Despite its present decline, the Gemeinwirtschaftslehre yields a valuable implication that nonprofit firms address market failure by supplanting the pecuniary entrepreneurial motivation with a nonpecuniary one. In this article, this implication is used to reconsider two central and controversial issues in modern nonprofit economics: the rationale behind the nondistribution constraint in nonprofit firms, and the integration between the market failure and supply-side theories of the nonprofit sector. The article concludes by discussing the emerging prospects for empirical research.

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