Rethinking non-governmental organizations – at the crossroad of economics and civil society

Abstract

RESEARCH OBJECTIVE: The article aims to close the existing knowledge gaps, show why non-governmental organizations are founded and maintained, and elaborate and systematize the existing knowledge through an analysis of the existing subdisciplines within economics, laying the groundwork for the economics of non-governmental organizations.
 RESEARCH PROBLEM AND METHODS: The article was written based on a structured literature review with an approach similar to the grounded theory method. The research question is: Why are NGOs founded and what is their modus operandi?
 PROCESS OF ARGUMENTATION: After determining the research question, literature evidence was collected from a variety of sources, which led to the creation of a theoretical explanatory model. Nevertheless, a deductive, top-down approach has been taken to present the final model in a more comprehensible and transparent way.
 RESEARCH RESULTS: Based on the institutional hierarchy of O.E. Williamson and drawing from the theoretical framework of the economics of the public sector and the motives behind the sharing economy, a model was built that explains why NGOs are founded and maintained, thus elucidating the route from social theory (in particular, institutional environments) all the way to undertaking actions to solve a given issue.
 CONCLUSIONS, INNOVATIONS, AND RECOMMENDATIONS: The article influences and enhances the current state of knowledge regarding non-governmental institutions, including the placement of NGOs in particular disciplines within economics. It also significantly supports researchers doing subsequent studies regarding this area of social science. After further research in the proposed direction, more practical implications may arise in the future, including improvements in the management of NGOs that will facilitate their more efficient operation.