Economic analysis and the third sector: Overview of economic analysis in relation to the third sector

This paper takes both a practical and critical view of economic analysis in relation to the third sector. It argues that there is no one kind of economic analysis but that a certain form of such thinking, and associated techniques, has become dominant in thinking and practice. That mainstream approach is appropriate for certain functions and understandings but can also act to funnel or prioritise certain dimensions of third sector activity, ignoring others. It is important therefore in any economic analytic work on the third sector to engage with different forms of economic theory and practice (such as ecological, or institutional economics) as well as cross-disciplinary approaches (such as geographical or socio-economics). Economic analysis may often just apply to the relative impact of the third sector on accepted statistical dimensions of the economy, such as employment or GDP. This paper argues that this approach misses the many and complex ways in which different parts of the third sector may impact on economic activity in the UK. Ultimately, the aim of this paper is to range over issues of both practical and conceptual importance, in order to enable a more informed and contextualised sense of options, priorities, and possibilities for further in-depth work in the economic analysis of the third sector.