Efficiency in Third Sector Partnerships for Delivering Local Government Services: The role of economies of scale, scope and learning

Abstract

Third sector partnerships are under pressure to change in the light of the increasing cost pressures on local public services. The literature throws doubt on the level of economies of scale and suggests that more attention should be given to economies of scope and learning. The common conflation of economies of size with economies of scale has led policymakers to overemphasize larger scale providers and has distorted the strategies which third sector organizations have adopted, pushing them towards mergers and consortia based on scale.

Key words:

• Third sector partnerships
• scale economies
• scope economies
• economies of learning
• efficiency strategy