Economic Approaches to the Voluntary Sector: A Note on Voluntary Failure and Human Service Delivery

Throughout the advanced English-speaking democracies governments are embracing the voluntary sector in human service delivery and Australia is no exception, with its new Job Network program. Fortunately economic theory has much to contribute in the formulation of appropriate policies. The extant market failure and government failure paradigms, which have proved so useful to policy makers, can be augmented by an emergent theory of voluntary sector failure, in order to design social service delivery policies based on comparative institutional advantage. This paper summarises the generic economic approaches to the voluntary sector and outlines the embryonic theory of voluntary failure. It concludes by briefly discussing the applicability of the theory of voluntary sector behaviour to the delivery of public employment services in contemporary Australia.