IDEAS home Printed from https://ideas.repec.org/a/prg/jnlpep/v2013y2013i4id467p542-557.html
   My bibliography  Save this article

Certification and Its Impact on Quality of Charities

Author

Listed:
  • Katarína Svítková

Abstract

Nonprofit organizations in transition countries experience low trust and consequently low income from donations. The study introduces one particular solution to the problem, certification, and examines its impact on the quality of the nonprofit organizations in the market. The situation is illustrated in a game theoretical model, with a manager, donor, certifier, and the charity providing a charitable good: for simplicity, charity is either good or bad: A good charity spends all the resources on the charitable good, and a bad one diverts all resources to the private consumption of its manager (for-profit in disguise). We show that for a wide parameter range and for two different disclosure rules, the presence of a certifier in the market increases the incentives for managers to choose good charities, leading to an improvement in the market as the share of good charities increases.

Suggested Citation

  • Katarína Svítková, 2013. "Certification and Its Impact on Quality of Charities," Prague Economic Papers, Prague University of Economics and Business, vol. 2013(4), pages 542-557.
    • Handle: RePEc:prg:jnlpep:v:2013:y:2013:i:4:id:467:p:542-557
    DOI: 10.18267/j.pep.467
    as

    Download full text from publisher

    File URL: http://pep.vse.cz/doi/10.18267/j.pep.467.html
    Download Restriction: free of charge
    File URL: http://pep.vse.cz/doi/10.18267/j.pep.467.pdf
    Download Restriction: free of charge
    File URL: https://libkey.io/10.18267/j.pep.467?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jan Hanousek & Evžen Koèenda & Katarína Svítková, 2010. "Corporate Philanthropy in the Czech and Slovak Republics," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 60(2), pages 102-121, May.
    2. George A. Akerlof, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 97(4), pages 543-569.
    3. Saul Estrin & Jan Hanousek & Evzen Kocenda & Jan Svejnar, 2009. "The Effects of Privatization and Ownership in Transition Economies," Journal of Economic Literature, American Economic Association, vol. 47(3), pages 699-728, September.
    4. Katarina Svitkova & Andreas Ortmann, 2006. "Certification as a Viable Quality Assurance Mechanism: Theory and Suggestive Evidence," CERGE-EI Working Papers wp288, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Katarina Svitkova, 2007. "Prompted to Be Good: The Impact of Certification on the Quality of Charities," CERGE-EI Working Papers wp320, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    2. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2009. "Homo Reciprocans: Survey Evidence on Behavioural Outcomes," Economic Journal, Royal Economic Society, vol. 119(536), pages 592-612, March.
    3. Diana Hechavarría & Charles Matthews & Paul Reynolds, 2016. "Does start-up financing influence start-up speed? Evidence from the panel study of entrepreneurial dynamics," Small Business Economics, Springer, vol. 46(1), pages 137-167, January.
    4. David Fairris & Gurleen Popli & Eduardo Zepeda, 2008. "Minimum Wages and the Wage Structure in Mexico," Review of Social Economy, Taylor & Francis Journals, vol. 66(2), pages 181-208.
    5. Monika Janičíková, 2014. "Asymmetric information within Initial Public Offerings [Asymetrická informace při primárních emisích akcií]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2014(2), pages 81-91.
    6. Jonas Agell & Helge Bennmarker, 2003. "Endogenous Wage Rigidity," CESifo Working Paper Series 1081, CESifo.
    7. Daniel Agness & Travis Baseler & Sylvain Chassang & Pascaline Dupas & Erik Snowberg, 2022. "Valuing the Time of the Self-Employed," Working Papers 2022-2, Princeton University. Economics Department..
    8. Ghidoni, Riccardo & Suetens, Sigrid, 2019. "Empirical Evidence on Repeated Sequential Games," Other publications TiSEM ff3a441f-e196-4e45-ba59-c, Tilburg University, School of Economics and Management.
    9. repec:hum:wpaper:sfb649dp2016-029 is not listed on IDEAS
    10. Hugh-Jones, David & Ooi, Jinnie, 2023. "Where do fairness preferences come from? Norm transmission in a teen friendship network," European Economic Review, Elsevier, vol. 157(C).
    11. Luca Gambetti & Julián Messina, 2018. "Evolving Wage Cyclicality in Latin America," The World Bank Economic Review, World Bank, vol. 32(3), pages 709-726.
    12. Denisova, Irina & Eller, Markus & Frye, Timothy & Zhuravskaya, Ekaterina, 2012. "Everyone hates privatization, but why? Survey evidence from 28 post-communist countries," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 44-61.
    13. David Greenaway & Alessandra Guariglia & Zhihong Yu, 2014. "The more the better? Foreign ownership and corporate performance in China," The European Journal of Finance, Taylor & Francis Journals, vol. 20(7-9), pages 681-702, September.
    14. Becchetti, Leonardo & Ciciretti, Rocco & Hasan, Iftekhar, 2009. "Corporate social responsibility and shareholder's value: an empirical analysis," Bank of Finland Research Discussion Papers 1/2009, Bank of Finland.
    15. Faralla, Valeria & Borà, Guido & Innocenti, Alessandro & Novarese, Marco, 2020. "Promises in group decision making," Research in Economics, Elsevier, vol. 74(1), pages 1-11.
    16. Sauermann, Jan, 2015. "Worker Reciprocity and the Returns to Training: Evidence from a Field Experiment," IZA Discussion Papers 9179, Institute of Labor Economics (IZA).
    17. Christiane Bradler & Susanne Neckermann, 2019. "The Magic of the Personal Touch: Field Experimental Evidence on Money and Appreciation as Gifts," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(3), pages 1189-1221, July.
    18. Forth, John & Singleton, Carl & Bryson, Alex & Phan, Van & Ritchie, Felix & Whittard, Damian, 2024. "The Impact of a Rising Wage Floor on Labour Mobility across Firms," IZA Discussion Papers 17132, Institute of Labor Economics (IZA).
    19. Daniele Checchi & Cecilia García‐Peñalosa, 2010. "Labour Market Institutions and the Personal Distribution of Income in the OECD," Economica, London School of Economics and Political Science, vol. 77(307), pages 413-450, July.
    20. Fernanda Rivas, 2009. "Wage dispersion and workers` effort," Economics Bulletin, AccessEcon, vol. 29(2), pages 788-794.
    21. Tetsuo Yamamori & Kazuyuki Iwata, 2023. "Wage claim detracts reciprocity in labor relations: experimental study of gift exchange games," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 18(3), pages 573-597, July.

    More about this item

    Keywords

    quality assurance; certification; fundraising; non-profit organizations;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:prg:jnlpep:v:2013:y:2013:i:4:id:467:p:542-557. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stanislav Vojir (email available below). General contact details of provider: https://edirc.repec.org/data/uevsecz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.