MG4H6E      Half Unit
The Hybrid Economy

This information is for the 2025/26 session.

Course Convenor

Availability

  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 from different sectors with the aim of achieving both social and environmental returns as well as financial ones.   These include social enterprises, cooperatives and mutuals, strategic philanthropy, 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 ‘hybrid’ 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.  It focuses specifically on three emerging organisations or structures: the social enterprise (of varying kinds); cooperative and mutual organisations; and strategic philanthropy. 

A central focus is the opportunity created by bringing together market and business mechanisms and the social – but also the consequent challenge and complexity of achieving social impact through hybrid organisations, hybrid funding streams and hybrid mechanisms of coordination.  The course explores how to design incentive structures which respond to the complex web of motivations of actors in this field, and the organisational tension inherent in responding to double or triple bottom lines and mixing different cultures and values.  The use of market mechanisms to resolve social problems is subject to various criticisms, and the course concludes by exploring some of the main critiques put forward.

This course might use Cadmus for submitting assessments. This platform is currently being evaluated by LSE for AI-resilient assessment. For more information, visit Cadmus Assessment Edit Tracking - Guidance for Students.

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

One formative assessment exercise will be offered: a practice essay.

• 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

Proposal (50%)

Essay (50%)

Assessment will be through an individual coursework assignment (50%) and an open book e-exam where students will be asked to answer essay questions (50%).