MG4H6E      Half Unit
The Hybrid Economy

This information is for the 2018/19 session.

Teacher responsible

Prof Julian Le Grand Marshall Institute, 5 Lincoln's Inn Fields and Dr Jonathan Roberts Marshall Institute, 5 Lincoln's Inn Fields


This course is compulsory on the Executive MSc in Social Business and Entrepreneurship. This course is not available as an outside option.

Course content

     Following the failure of both states and markets to resolve persistent social problems, a hybrid economy is emerging in which new organisational forms and new multi-actor collaborations blend outcomes, behaviours and structures drawn from different sectors with the aim of achieving both social and financial returns.   Examples of organisations and activities in this emerging economy include corporate firms that internalise social purpose, business-oriented philanthropists, private organisations that spin out of the state sector (public service mutuals), social impact investment, and complex collaborative financial instruments such as social impact bonds.

     This course explores the economics and politics of this emerging phenomenon.   It provides students with knowledge of the newly developing institutions, organisations and mechanisms, and with the critical and analytic skills through which to evaluate them.  It assesses the historic and contemporary failures by the state, market and voluntary sector in developed and developing economies; and it considers the competitive advantage and disadvantage of the hybrid social business as a remedy for these failures.  The course focuses specifically on motivation and incentive theory, exploring how we can design organisations and wider institutions that both nurture and capitalise upon altruism, but that also acknowledge more self-directed motivations.

     The course explores the scope and nature of the political relationship between hybrid organisations and the state, exploring whether the function of the social business is best conceived as a complement to state services, a replacement for state services in conditions of austerity and exponentially growing demand, or separately as an innovative laboratory for social interventions.  It concludes by exploring ethical criticisms of the hybrid economy, focusing in particular on controversies about the introduction (or intrusion) of the market and business into the social or public realm.


Ten integrated lecture/seminars of three hours each, delivered across two modules (teaching blocks).

Formative coursework

Two formative assessment exercises will be offered: first, a practice take home exam; second, submission of a draft plan for the group presentation summative task.

Indicative reading

  • Barr, N. (2012).  Economics of the Welfare State (5th edition). Oxford: Oxford University Press
  • Dees, G. (2012). "A Tale of Two Cultures: Charity, Problem Solving, and the Future of Social Entrepreneurship."  Journal of Business Ethics 111(3): 321-334
  • Eikenberry, A. (2009).  “Refusing the Market: A Democratic Discourse for Voluntary and Nonprofit Organizations”.  Nonprofit and Voluntary Sector Quarterly 38(4): 582-596.
  • Friedman, M. (1988).  “The Social Responsibility of Business is to Increase Its Profits” in T. Donaldson, P. Werhane and M Cording (eds.), Ethical Issues in Business: A Philosophical Approach. Englewood Cliffs, N.J.: Prentice Hall.  p.217-223
  • Kerlin, J. (2006).  “Social Enterprise in the United States and Europe: Understanding and Learning from the Differences”.  Voluntas 17(3): 246-262
  • Le Grand, J. (2006). Motivation, Agency and Public Policy: of Knights and Knaves, Pawns and Queens. Oxford: Oxford University Press
  • Salamon, L. (2014). Leverage for Good: An Introduction to the New Frontiers of Philanthropy and Social Investment. Oxford: Oxford University Press
  • Sandel, M. (2013).  What Money Can’t Buy: The Moral Limits of Markets.  London: Penguin
  • Skelcher, C. and S. Rathgeb Smith (2014).  “Theorizing hybridity: institutional logics, complex organizations, and actor identities: the case of nonprofits.”  Public Administration (Early View 2014)
  • Yunus, M. (2010). Building Social Business.  New York: Public Affairs


Take home exam (75%) and presentation (25%).

Assessment will be through a group presentation (25%) and a take home exam at the end of the course (75%).

Key facts

Department: Management

Total students 2017/18: Unavailable

Average class size 2017/18: Unavailable

Controlled access 2017/18: No

Value: Half Unit

Guidelines for interpreting course guide information

Personal development skills

  • Self-management
  • Team working
  • Problem solving
  • Application of information skills
  • Communication
  • Specialist skills