Civil Society and the Professions in Eastern Europe: Social Change and Organizational Innovation in Poland - Book Review

Administrative Science Quarterly, Sept, 2002 by Mayer N. Zald

The economic theory of nonprofits attempts to answer the question of why some kinds of goods and services should be offered neither under public auspices nor private profit-making auspices. When demand is heterogeneous and cost benefits can be internalized to the transaction between buyers and seller (excludability), markets and profit-making firms will be selected. When benefits and costs cannot be internalized (non-excludability) and demand is homogeneous, goods and services will be offered under public auspices, state monopolistic bureaucracies. But what about the case in which demand is heterogeneous and there is non-excludability (either inherent in the good or because excludability is defined as societally unacceptable)? According to economic approaches, public and quasi-public goods with demand heterogeneity will be offered under nonprofit auspices that allow the organizations to draw on the support of those groups committed to that group of clients, or even state sponsorship designed to meet the segme nted demand. The non-distribution of profit constraint is a mechanism to link the organization to the group's desire for "public" accountability and legitimation.

Sokolowski finds the economic theories to be teleological--a functionalist meshing of how the properties of the goods and demand for them calls forth an organizational structure. It misses the question, says he, of entrepreneurial choice--what reason does a professional or other possible provider of services have for opting for one form or another? A more complete causal account must include the micro-mechanisms of choice and the motivations of providers. Sokolowski expands on the moral entrepreneurship theory of James (1987), the demand-side analysis of Ben-Ner and Van Hoomissen (1993), and transaction cost analyses. Essentially he argues that nonprofit status and claiming to offer a public good is a way of gaining legitimacy or reputational credits when the organization offers services that the client (and society) has difficulty evaluating because of problems of information asymmetries. Nonprofit status procures trust. He uses his interview data in a convincing way to show why some services that could be o ffered through nonprofits are not, because of the links between the providers and client base. His use of counterfactual arguments is superb. The core ideas are linked in subtle ways to his interview material. The book also makes many other contributions. For instance, chapter 6, "Organizations and Social Processing of Information," establishes the importance of cognitive schema in solving the problem of information glut and helping members develop perceptions of the relevance of organizational form to the time horizons and cost-benefit balances provided by the organization.

Although the book is an important contribution to the literature on nonprofits, it does have some problems, some minor, others more important. First, the book is mistitled. Although the historical section on associations in Poland under communist rule shows how the state suppressed civil society, the main part of the book is about service delivery in post-communist society. The link between nonprofit service organizations and the "civilness" of civil society needs to be articulated and argued. Do they contribute to public discourse? Do they serve as a buffer between state and society? Do they contribute to political pluralism? Discussion of civil society is in vogue today, but here, as elsewhere, the vogue is vague.