In Medio Stat Virtus: Does a Mixed Economy Increase Welfare?

19 Pages Posted: 15 Jul 2016

See all articles by Alessandro Fedele

Alessandro Fedele

Free University of Bozen-Bolzano - Faculty of Economics and Management

Sara Depedri

European Research Institute on Cooperative & Social Enterprises (EURICSE); University of Trento

Date Written: September 2016

Abstract

Over the past few decades, social enterprises have grown remarkably. This paper investigates how social enterprises affect access to social services (e.g., education and health‐care) and utilitarian welfare. To this end, two economic systems are compared: a market economy system, where all firms are profit maximizers, and a mixed economy system, where both for‐profit businesses and social enterprises are present. Findings show that individuals are more likely to have access to social services within mixed economy. Moreover, conditions are derived under which utilitarian welfare is larger within mixed economy. Public policies in support of social enterprises (e.g., subsidies) are shown to result in the following trade‐off: access to social services is further enhanced but utilitarian welfare is more likely to be lower than that within market economy.

Keywords: market economy, mixed economy, access to social services, utilitarian welfare, public policies

JEL Classification: L33, L38, L13, P51

Suggested Citation

Fedele, Alessandro and Depedri, Sara, In Medio Stat Virtus: Does a Mixed Economy Increase Welfare? (September 2016). Annals of Public and Cooperative Economics, Vol. 87, Issue 3, pp. 345-363, 2016. Available at SSRN: https://ssrn.com/abstract=2809939 or http://dx.doi.org/10.1111/apce.12131

Alessandro Fedele (Contact Author)

Free University of Bozen-Bolzano - Faculty of Economics and Management ( email )

Via Sernesi 1
39100 Bozen-Bolzano (BZ), Bozen 39100
Italy

Sara Depedri

European Research Institute on Cooperative & Social Enterprises (EURICSE) ( email )

Via S. Giovanni 36
38122 Trento (TN)
Italy

University of Trento

Via Giuseppe Verdi 26
Trento, Trento 38152
Italy

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