What Determines the Size of the Nonprofit Sector?

Article Review (Marketing Society)

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Article Review (Marketing Society)

The article “What Determines the Size of the Nonprofit Sector?: A Cross-Country Analysis of the Government Failure Theory” by Mastunanga et al., published on 24th February 2010, is one of the outstanding articles I recently read. As the name suggests, this article analyzes “the government failure theory using a cross-country data set” (Mastunanga et al., 2010, p. 180). This article mainly revisited Salamon et al. (2000) previous article. The previous article evaluated the impact of government failure theory on the nonprofit sector (Mastunanga et al., 2010). The article is, therefore, an improvement of the Salamon et al. model since it applies multivariate specification, thereby helping to correct the misspecification that is in Salmon's model by explicitly employing the variables that had been omitted in Salamon's model (Mastunanga et al., 2010, p. 188). “Moreover, it has helped solve the small sample problem in Salamon's model” (Mastunanga et al., 2010, p. 188). This article showed “that the government failure theory offered many rational explanations for the nonprofit sector's unique characteristics” (Mastunanga et al., 2010, p. 199). The article also showed that political freedom and democracy harm the nonprofit sector size, which varied to most people's expectations (Mastunanga et al., 2010). Even though it shows that the government's failure should not be easily rejected, this article shows a need for further empirical studies regarding this