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The Other Side of Ownership in Nonprofit Organizations: an Economic Rationale for Democracy

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  • Claudio Balestri

Abstract

Going beyond the deeply examined non-distribution constraint, which refers to the right to residual income, the paper investigates the other side of ownership, i.e. the right to residual control, to discover a general economic rationale for what we call “democracy”: a collective decision-making method based on the principles of equality and inclusiveness. The main result of the analysis is to point to the concept of perfect democracy as an efficient solution for the provision of public goods where other allocative mechanisms, such as the marketplace, fail. Copyright The Author(s) 2014

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  • Claudio Balestri, 2014. "The Other Side of Ownership in Nonprofit Organizations: an Economic Rationale for Democracy," Public Organization Review, Springer, vol. 14(2), pages 187-199, June.
    • Handle: RePEc:kap:porgrv:v:14:y:2014:i:2:p:187-199
    DOI: 10.1007/s11115-012-0214-7
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    References listed on IDEAS

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