Determinants of the Non-Profit Sector Size: Cross-Countries Empirical Analysis

The majority of studies on the growth of the nonprofit sector have focused only on the demand for nonprofit organizations. This paper attempts to understand the factors that create a demand for and supply of nonprofit organization. We cannot explain the recent increase in the number of nonprofits between countries without understanding the supply factors that facilitate or hinder their formation and operation. I examine the size of the nonprofit sector in 31 countries using supply side variables (government support, legal institutions and social capital) and traditional demand side factors (religious fractionalization, income per capita and government expenditure)