Hands, hearts and hybrids:economic organization, individual motivation and public benefit

Should policy makers rely upon firms motivated by profit and guided by the invisible hand of the market to promote public benefit or upon government agencies or nonprofits motivated by the compassionate heart? In this article we examine how the motivational assumptions implicit in these forms of economic organisation impact on their ability to promote the public good in key areas of the economy. We argue that in many circumstances it would be better to for policy makers to work with hybrid organisations: organisations that aim for both social and economic returns and whose stakeholders display the true complexity of individual motivation.