Government-Third Sector Relations in European Rural Development : A Critical Perspective

Rural development has significantly benefited from intensifying relations between the government and third sector organizations (TSOs) during last several decades. TSOs can introduce innovation in rural development in numerous ways: advocacy, awareness raising, contracting, direct delivery of public goods, etc. However, there is a growing concern that these partnerships may be prone to inefficiencies due to adverse fundraising incentives. Utilizing Young's (2000) typology in a literature review this paper illuminates potential causes for mission and goal displacement due to adverse incentives generated by public funding programs. The paper suggests that complementary and supplementary third sector organizations (TSOs) are generally more likely to suffer from adverse incentives as opposed to adversarial ones. Institutional merging between the TSOs and the state may significantly limit the scope for innovation in rural development