The Economics of Hybrid Organizations

This paper analyzes the recent progress in the understanding of a class of organizations known as hybrid forms. The growing literature on these forms, standing between markets and hierarchies, raises important questions about their nature and role in a market economy. Adopting a transaction-cost perspective, the paper first confronts the conceptual problem posed by this apparently heterogeneous set of arrangements. It then proceeds to explore the attributes characterizing their mode of coordination. The last section examines the complex forms of "government" adopted by these arrangements and proposes a model for encapsulating these properties. The conclusion emphasizes several remaining issues.