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The public sector has increasingly adopted the methods and values of the market to guide policy creation and management. Several public administration scholars in the United States have pointed out the problems with this, especially in relation to the impact on democracy and citizenship. Similarly, nonprofit organizations are adopting the approaches and values of the private market, which may harm democracy and citizenship because of its impact on nonprofit organizations' ability to create and maintain a strong civil society. This article reviews the major marketization trends occurring within the nonprofit sector-commercial revenue generation, contract competition, the influence of new and emerging donors, and social entrepreneurship-and surveys research on their potential impact on nonprofit organizations' contributions to civil society. The article ends with a discussion of the significance of marketization in the nonprofit sector for public administration scholars and public managers.
The public sector is increasingly adopting the methods and values of the market to guide policy creation and management. As the reinventing government (Osborne and Gaebler 1992) and New Public Management (Kettl 1997) movements have expanded in the United States, several scholars have pointed out the problems with overrelying on market approaches and values within the public sector. Many of these writers are especially concerned with the impact on democracy and citizenship (Box 1999; Box et al. 2001; deLeon and Denhardt 2000; Denhardt and Denhardt 2000; King and Stivers 1998; Terry 1998). Central to their argument is a concern that the market-based model of public management, with its emphasis on entrepreneurialism and satisfying individual clients' self-interest, is incompatible with democratic accountability, citizenship, and an emphasis on collective action for the public interest. Furthermore, the market model places little or no value on democratic ideals such as fairness and justice. Similarly, nonprofit organizations have increasingly adopted the approaches and values of the private market (Weisbrod 1998), leading to what Salamon (1997) calls the "marketization" of the nonprofit sector. Though marketization may be beneficial for the short-term survival needs of nonprofit organizations, it may have negative long-term consequences. Marketization may harm democracy and citizenship because of its impact on non-profit organizations' ability to create and maintain a strong civil society.
The concept of civil society has many meanings. In its contemporary version, Walzer broadly defines civil...