This article explores whether human service organisations
in the voluntary
sector possess characteristics which might assure them of possible
comparative advantages over the for-profit and public sectors with
respect to certain sorts of users. We argue that there are
inherent structural
characteristics of organisations in each sector (for example, ownership,
stakeholders and resources) which predispose them to respond
more or less sensitively to different states of
‘disadvantage’ experienced
by their users. These states are defined as financial, personal,
societal and
community disadvantage. We suggest that voluntary organisations have
a comparative advantage over other sector agencies in areas where their
distinctive ambiguous and hybrid structures enable them to overcome
problems of principal–agent gap, median voter reluctance,
weak messages from politicians to staff and lack of market interest.
By taking ideas of comparative advantage into account, a coherent case
can be developed regarding the strengths and weaknesses of the expanded
role of voluntary agencies in welfare provision. In essence, the
article contends
that a diminution in stakeholder ambiguity, resulting from organisational
growth, lowers the comparative advantage of voluntary agencies.