Three-Sector Frameworks

Discussion

Limits of the three-sector framework

David Ronfeldt:

"As these papers show, today’s policymakers, politicians, and media pundits, not to mention social theorists, mostly behave as though our society, our system, has only two sectors that matter: the public sector and the private sector. Our leaders have long relied on a two-sector framework to propose fixes for America’s mounting health, education, welfare, environmental, and other domestic problems. Some proposals call for more government programs, others for more privatization, a few for better public-private collaboration.

By now, this two-sector framework is deeply entrenched and tribalized. It is also just plain wrong-headed. It wasn’t true in the past. It will be even less true in the future. For it neglects two other sectors that belong in the framework: one very old, and still occasionally recognized, as these papers set out; the other so new its prospective emergence is barely discernible today.

Our society used to regularly recognize three major sectors — besides the public and private sectors, Americans also recognized that their society’s functioning depended on the vitality of civil society’s home- and community-based sector(s) and their arrays of voluntary groups, social clubs, charitable associations, and activist NGOs. When not acting alone, they would often assist public- and private-sector actors with all sorts of local issues. Indeed, this sector used to have a well-regarded, albeit lesser place in policymaking circles. And for decades, lots of theorists and activists have called for better recognition of civil society and its sector(s), often by new names — e.g., “social sector” (Drucker), “third sector” (e.g., Salamon; Rifkin), “people sector” (Mintzberg).

But lately, especially nowadays, this sector’s significance is acknowledged mostly as an afterthought. If its policymaking value could be recognized anew in Washington — if a three-sector framework were truly put back in play, as these papers urge — that would help. But this is no small goal, given the power, profit, and privilege, as well as inertia and tribalism, that are overwhelmingly concentrated in the dominant two-sector framework.

It usually takes a crisis to illuminate civil-society’s importance — the papers at hand are correct to emphasize this, and to call for correctives that would revitalize the three-sector framework. But many other efforts have urged likewise in the past, and so far not little if anything has changed. The Covid-19 crisis has presented a new opportunity — but political trends and rhetoric in Washington just continue to harden around the two-sector framework."

It will take more than this singular health crisis to prompt deep reform. Other motivating crises, including disruptive climate change, will have to come to the fore as well, and all these crises will have to be rethought, not in isolation but as interrelated and interactive. By then, people may begin to see that what’s needed is not a revitalized three-sector framework, but steps toward constructing a four-sector framework." (https://twotheories.blogspot.com/2019/07/toward-new-sectorism-3-attractive-but.html?)

Bowles & Carlin’s three-sector framework

David Ronfeldt:

"Their article makes good sense regarding what framework to use for addressing and resolving complex policy issues. Their paper illuminates that concern with solid reasoning as well as two elegant charts (best I’ve seen lately) about how government, market, and civil-society actors and their sectors may work together. In their words:

“COVID-19, for better or worse, brings into focus a third pole in the debate: call it community or civil society. In the absence of this third pole, the conventional language of economics and public policy misses the contribution of social norms and of institutions that are neither governments nor markets — like families, relationships within firms, and community organisations.”

“No combination of government fiat and market incentives, however cleverly designed, will produce solutions to problems like the pandemic. What we call civil society (or the community) provides essential elements of a strategy to kill COVID-19 without killing the economy.”

“These examples underline an important truth about institutional and policy design: the poles of the institution space — at least ideally — are complements not substitutes. Well-designed government policies enhance the workings of markets and enhance the salience of cooperative and other socially valuable preferences. Well-designed markets both empower governments and make them more accountable without crowding out ethical and other pro-social preferences.” (https://twotheories.blogspot.com/2020/10/toward-new-sectorism-4-same-old.html?)

Scharmer’s more-or-less three-sector vision

David Ronfeldt:

"In observing how people — people, not government or business — are responding to the pandemic, Scharmer is heartened to see “the further awakening of a movement taking shape across the planet … the activation of a deep and widely held longing for profound societal and civilizational renewal.” As a futurist, he heralds the continued emergence of “the new superpower in the making — the rise of a new pattern of collective action that operates from an awareness of the whole: Awareness-Based Collective action (ABC)” on a planetary scale.

After blaming Big Government, Big Business, and Big Tech for a “massive institutional failure connected to these issues,” he asks: “Should health and healthcare — or core parts of it — be organized by a different type of enterprise, one that is driven by a social mission instead of profit?” In reply, he calls for “rethinking the framework of public health in terms of the planet: putting planetary health and well-being first in our framing of what a good healthcare system is trying to do.” In his view, this means creating “new types of societal innovation infrastructures” — new learning infrastructures, democratic governance infrastructure, and economic infrastructures.

His proposal is not clear about the details, and it’s not explicitly a three-sector view. But it is in keeping with his long-standing quest to transform capitalism and society — specifically, to “upgrade our operating systems” by evolving toward “Capitalism 4.0” or “Operating System 4.0.” For our society has become so complex “you cannot solve ‘4.0 challenges’ with response mechanisms that are rooted in operating systems 2.0 and 3.0.” (https://twotheories.blogspot.com/2020/10/toward-new-sectorism-4-same-old.html?)

Mintzberg, Etzioni, and Mantere’s three-sector framework

David Ronfeldt:

"They summarize their triform argument very concisely right up front:

“Progress in dealing with the problem of climate change will require that the institutions of government, business, and community work, not in isolation from each other, let alone at cross purposes, but by reinforcing each other’s efforts through consolidation.”

They then categorize various climate-strategy initiatives “by sector … because the public, plural, and private sectors seem to favor different processes.” Of these processes, “orchestrated planning” is favored in the public sector, “autonomous venturing” in the private sector, and “grounded engagement” in the “plural sector.”

In their definition, “The plural sector includes those formal and informal associations that are neither publicly owned by government nor privately owned by investors. Some are owned by members, such as cooperatives, while others are owned by no one, such as the Sierra Club and the Girl Scouts.” It’s a sector whose associations are often led by “social entrepreneurs.” In other words, it is mostly a civil-society sector.

In addition to showing that different climate-change initiatives may involve different sectors, and different combinations of sectors, Mintzberg and his colleagues urge that these sectors and their actors work together, not alone and especially not at cross purposes.

Indeed, what they urge is entirely in accord with TIMN dynamics:

“By contrast, when the three sectors work together, to constructively reinforce each other’s efforts, they can together generate an ascending spiral of consolidation. …

“Each activity can thus spawn more activities in the other sectors as well as in its own, so that, together, they can feed this ascending spiral of consolidation. Perhaps more significantly, there can also be constructive networks of consolidation, as the organizations of the three sectors interact with each other in many different ways—alliances, partnerships, joint ventures, and so on. …

“In any event, addressing the problem of climate change will likely require that each of the sectors attends to what it does best, in conjunction with the other two. In general, communities engage, governments legitimize, and businesses invest. We believe that this is how healthy societies progress.”

Preferring the term “worldly” to “global,” they note that new narratives and mindsets are needed: “A worldly mindset can prepare actors to appreciate their differences, and thereby work together towards consolidated ascension, from group to globe.” (https://twotheories.blogspot.com/2020/10/toward-new-sectorism-4-same-old.html?)

More information

* including the commons, we get a Fourth Sector !!