Measuring the Growth of the Nonprofit Sector: A Longitudinal Analysis

• DOI: http://doi.org/10.1111/puar.12306
• Published date: 01 March 2015
• Author: You Hyun Kim,Seok Eun Kim
• Date: 01 March 2015

Seok Eun Kim is associate professor in

the Department of Public Administration

at Hanyang University, Seoul, South Korea.

His current research focuses on nonprof‌i t

growth and management, the relationship

between physical setting and human

responses, and corporate social responsibil-

ity and the role of government.

E-mail: seokeun@hanyang.ac.kr

You Hyun Kim is chief of staff at the

National Assembly in South Korea. He

received a doctoral degree in economics

from Hanyang University, Seoul, South

Korea. His research focuses on public and

nonprof‌i t economics.

E-mail: sergay23@hanmail.net

242 Public Administration Review • March | April 2015

Public Administration Review,

Vol. 75, Iss. 2, pp. 242–251. © 2014 by

The American Society for Public Administration.

DOI: 10.1111/puar.12306.

Seok Eun Kim

Hanyang University, South Korea

You Hyun Kim

Korean National Assembly, South Korea

Abstract: Scholars have examined the ef‌f ects of various environmental factors on the nonprof‌i t sector to elucidate

the role of nonprof‌i ts in modern society. However, researchers report a paucity of information on nonprof‌i t growth

using longitudinal data, especially outside the United States.  is article analyzes 40 years of political, economic,

and sociodemographic data in South Korea to test theories of nonprof‌i t growth and to determine whether the

concepts and theories developed for Western societies can be successfully applied in South Korea.  e results

show that demand- and supply-side economic theories account for variations in nonprof‌i t growth, but the existing

socioeconomic explanations fail to recognize the political inf‌l uences on nonprof‌i t development. Nonprof‌i t

organizations have emerged from social and economic necessity but have also been nurtured within a political

framework.

Practitioner Points

•  e interdependence of government and nonprof‌i t organizations might be the norm, but each country has

its own form of such interdependence depending on its historical roots.

• Nonprof‌i ts can thrive beyond the GDP growth rate when a suf‌f‌i cient level of demand heterogeneity is

nurtured in society.

•  e emergence of a welfare state has reduced the role of service-providing nonprof‌i t organizations and

instead spawned civic advocacy and labor unions.

Corbin 1999; Grønbjerg and Paarlberg 2001; Saxton

and Benson 2005; Twombly 2003). However, most

previous studies have used either case-based analyses

(Burger and Veldheer 2001) or cross-sectional data

(Ben-Ner and Van Hoomissen 1992; Bielefeld 2000;

Grønbjerg and Paarlberg 2001); limited research has

measured nonprof‌i t growth using longitudinal data.

In addition, most empirical studies of nonprof‌i t

growth have been conducted in the Western world,

even though “most Asian countries have a strong third

sector and a rich tradition of philanthropy” (Lyons

and Hasan 2002, 107). China is estimated to have

more than half a million registered nonprof‌i ts (Houser

Institute for Civil Society 2012). Japan also had about

one-half million registered and unregistered nonprof-

its and 32 million volunteers as of 2001 (Japanese

NGO Center for International Cooperation 2012).

South Korea has experienced one of the most active

civil society movements in the world (Bidet 2002;

Lyons and Hasan 2002).

Although the number of nonprof‌i ts has been increas-

ing rapidly in all Asian countries, South Korean non-

prof‌i ts have a few distinct characteristics.  e 2000

Act of Assistance for Non-Prof‌i t Civil Organizations

Measuring the Growth of the Nonprof‌i t Sector:

A Longitudinal Analysis

Understanding the ef‌f ects of political, eco-

nomic, and social factors on the growth

of the nonprof‌i t sector is important for

comprehending emerging demands and develop-

ments that shape the role of nonprof‌i ts in modern

society (Anheier 2013; Dighe 2002). Nonprof‌i t

growth calls for new government–nonprof‌i t relation-

ships, as governments have devolved responsibility for

providing public services to nonprof‌i t organizations

using a range of policy tools such as privatization

and tax relief (Lecy and Van Slyke 2013).  e push

to privatize government services tends to increase

the market share of the nonprof‌i t sector, but market

penetration into social services has forced nonprof‌i t

organizations to operate like businesses in order to

survive (Young and Salamon 2002). Concurrently, the

social and political roles of nonprof‌i ts have received

renewed attention in the context of civil society,

democracy establishment, and political participation

(Anheier 2013).

Scholars have examined the factors driving the

growth of the nonprof‌i t sector and the proper role

of nonprof‌i t organizations in society (Ben-Ner and

Van Hoomissen 1992; Burger and Veldheer 2001;