Capitalism, Institutional Complementarities and the Third Sector. The Private Institutions for Social Solidarity (IPSS) in Portugal

How can one explain the different configurations adopted internationally by the third sector? Why do the third sector organizations (TSO) assume different logics, dynamics and functioning principles in different countries? Why do they interact in such a diverse manner with the other sectors of the economy?

Combining a quantitative and a qualitative analysis, this paper finds that the particular configuration of the third sector in Portugal can be explained through a dynamic process that involves the constitution of institutional complementarities which were being built via established compromises between social and political forces. The analysis focuses particularly on those TSOs which function in the social welfare sphere – the Private Institutions for Social Solidarity (IPSS) – and shows that their characteristics and form of functioning are related to the variety of capitalism operating in Portugal.

The study also compares the IPSS with their English counterparts – the Charities. It reveals that their differences – related to the composition of the workforce by sphere of activity, their state-oriented or market-oriented nature, concentration or dispersion level, volatility, innovation and marketing capacity, relations with the financial system and accountability – are explained by their embeddedness in the different models of capitalism, generally designated as the Mediterranean model and the Anglo-Saxon model, consolidated through a set of specific institutional complementarities.

 

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