IDEAS home Printed from https://ideas.repec.org/a/ucp/ecdecc/doi10.1086-682885.html
   My bibliography  Save this article

A Model of Nongovernmental Organization Regulation with an Application to Uganda

Author

Listed:
  • Ronelle Burger
  • Indraneel Dasgupta
  • Trudy Owens

Abstract

We develop a model of regulation of service-delivery nongovernmental organizations (NGOs), where future grants are conditional on prior spending of some minimal proportion of current revenue on direct project-related expenses. Such regulation induces some NGOs to increase current project spending but imposes wasteful costs of compliance verification on all NGOs. Under a large class of parametric configurations, we find that regulation increases total discounted project expenditure over a regime of no regulation, when verification costs constitute no more than 15% of initial revenue. We characterize the optimal regulatory policy under these configurations. We apply our analysis to a large sample of NGOs from Uganda and find regulation to be beneficial in that context.

Suggested Citation

  • Ronelle Burger & Indraneel Dasgupta & Trudy Owens, 2015. "A Model of Nongovernmental Organization Regulation with an Application to Uganda," Economic Development and Cultural Change, University of Chicago Press, vol. 64(1), pages 71-111.
    • Handle: RePEc:ucp:ecdecc:doi:10.1086/682885
    DOI: 10.1086/682885
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/682885
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: http://dx.doi.org/10.1086/682885
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/682885?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. Federica VIGANO & Andrea SALUSTRI, 2015. "Matching profit and Non-profit Needs: How NPOs and Cooperative Contribute to Growth in Time of Crisis. A Quantitative Approach," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(1), pages 157-178, March.
    2. Ronelle BURGER & Indraneel DASGUPTA & Trudy OWENS, 2015. "Why Pay NGOs to Involve the Community?," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(1), pages 7-31, March.
    3. Mookherjee, Dilip & Png, I P L, 1995. "Corruptible Law Enforcers: How Should They Be Compensated?," Economic Journal, Royal Economic Society, vol. 105(428), pages 145-159, January.
    4. Martens,Bertin & Mummert,Uwe & Murrell,Peter & Seabright,Paul, 2008. "The Institutional Economics of Foreign Aid," Cambridge Books, Cambridge University Press, number 9780521055390, September.
    5. Rachel M. McCleary & Robert J. Barro, 2006. "U.S.-Based Private Voluntary Organizations: Religious and Secular PVOs Engaged in International Relief & Development," NBER Working Papers 12238, National Bureau of Economic Research, Inc.
    6. Platteau, Jean-Philippe & Somville, Vincent & Wahhaj, Zaki, 2014. "Elite capture through information distortion: A theoretical essay," Journal of Development Economics, Elsevier, vol. 106(C), pages 250-263.
    7. Cecilia NAVARRA & Elena VALLINO, 2015. "Who Had the Idea to Build Up a Village Organization? Some Evidence from Senegal and Burkina Faso," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(1), pages 33-72, March.
    8. Spiros Bougheas & Indraneel Dasgupta & Oliver Morrissey, 2007. "Tough love or unconditional charity?," Oxford Economic Papers, Oxford University Press, vol. 59(4), pages 561-582, October.
    9. Ritva Reinikka & Jakob Svensson, 2010. "Working for God? Evidence from a Change in Financing of Nonprofit Health Care Providers in Uganda," Journal of the European Economic Association, MIT Press, vol. 8(6), pages 1159-1178, December.
    10. Aldashev, Gani & Verdier, Thierry, 2010. "Goodwill bazaar: NGO competition and giving to development," Journal of Development Economics, Elsevier, vol. 91(1), pages 48-63, January.
    11. Robinson, Mark & Riddell, Roger C., 1995. "Non-Governmental Organizations and Rural Poverty Alleviation," OUP Catalogue, Oxford University Press, number 9780198233305.
    12. Jeremy Thornton, 2008. "Competition, Contractibility, and the Market for Donors to Nonprofits," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 24(1), pages 215-246, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gani Aldashev & Marco Marini & Thierry Verdier, 2017. "Samaritan Bundles: Inefficient Clustering in NGO Projects," Working Papers 6/17, Sapienza University of Rome, DISS.
    2. Gani Aldashev & Marco Marini & Thierry Verdier, 2020. "Samaritan Bundles: Fundraising Competition and Inefficient Clustering in NGO Projects," The Economic Journal, Royal Economic Society, vol. 130(630), pages 1541-1582.
    3. Denisa Gajdová & Helena Majdúchová, 2018. "Financial Sustainability Criteria and their testing in the conditions of the Slovak Non-Profit Sector," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 12(1), March.

    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. Ronelle Burger & Indraneel Dasgupta & Trudy Owens, 2011. "A Model of NGO Regulation with an Application to Uganda," Working Papers 22/2011, Stellenbosch University, Department of Economics.
    2. Gani ALDASHEV & Cecilia NAVARRA, 2018. "Development Ngos: Basic Facts," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(1), pages 125-155, March.
    3. Peter Nunnenkamp & Hannes Öhler, 2012. "Funding, Competition and the Efficiency of NGOs : An Empirical Analysis of Non‐charitable Expenditure of US NGOs Engaged in Foreign Aid," Kyklos, Wiley Blackwell, vol. 65(1), pages 81-110, February.
    4. Burger Ronelle & Owens Trudy & Prakash Aseem, 2018. "Global Non-Profit Chains and the Challenges of Development Aid Contracting," Nonprofit Policy Forum, De Gruyter, vol. 9(4), pages 1-12, December.
    5. Fałkowski, Jan & Kurek, Przemysław J., 2024. "Religious symbols in the public sphere and development of the third sector: Some evidence from rural Poland," Journal of Comparative Economics, Elsevier, vol. 52(2), pages 495-508.
    6. Ronelle BURGER & Indraneel DASGUPTA & Trudy OWENS, 2015. "Why Pay NGOs to Involve the Community?," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(1), pages 7-31, March.
    7. repec:got:cegedp:109 is not listed on IDEAS
    8. repec:bla:annpce:v:89:y:2018:i:1:p:125-155 is not listed on IDEAS
    9. Leonardo BECCHETTI & Fabio PISANI, 2015. "The Determinants of Outreach Performance of Social Business: an Inquiry on Italian Social Cooperatives," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(1), pages 105-136, March.
    10. Gani Aldashev & Marco Marini & Thierry Verdier, 2017. "Samaritan Bundles: Inefficient Clustering in NGO Projects," Working Papers 6/17, Sapienza University of Rome, DISS.
    11. Niels Hermes & Marek Hudon, 2018. "Determinants Of The Performance Of Microfinance Institutions: A Systematic Review," Journal of Economic Surveys, Wiley Blackwell, vol. 32(5), pages 1483-1513, December.
    12. Aldashev, Gani & Marini, Marco & Verdier, Thierry, 2014. "Brothers in alms? Coordination between nonprofits on markets for donations," Journal of Public Economics, Elsevier, vol. 117(C), pages 182-200.
    13. Gani Aldashev & Esteban Jaimovich & Thierry Verdier, 2023. "The Dark Side of Transparency: Mission Variety and Industry Equilibrium in Decentralised Public Good Provision," The Economic Journal, Royal Economic Society, vol. 133(654), pages 2085-2109.
    14. Fonseca, Salvador & Carrizo Moreira, António & Mota, Jorge, 2024. "Profitability of microfinance institutions and borrowers: a systematic literature review," Cuadernos de Gestión, Universidad del País Vasco - Instituto de Economía Aplicada a la Empresa (IEAE).
    15. Fuminori Toyasaki & Tina Wakolbinger, 2014. "Impacts of earmarked private donations for disaster fundraising," Annals of Operations Research, Springer, vol. 221(1), pages 427-447, October.
    16. Firas Farhan Jedi & Sabri Nayan, 2018. "An empirical evidence on the effect of women board representation on firm performance of companies listed in Iraq Stock Exchange," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(1), pages 117-131, January.
    17. repec:aeg:report:2014-2 is not listed on IDEAS
    18. Carlo Borzaga & Manlio Calzaroni & Chiara Carini & Massimo Lori, 2019. "Structure and Performance of Italian Cooperatives: A Quantitative Analysis Based on Combined Use of Official Data," Journal of Entrepreneurial and Organizational Diversity, European Research Institute on Cooperative and Social Enterprises, vol. 8(1), pages 65-83.
    19. Gani Aldashev & Marco Marini & Thierry Verdier, 2020. "Samaritan Bundles: Fundraising Competition and Inefficient Clustering in NGO Projects," The Economic Journal, Royal Economic Society, vol. 130(630), pages 1541-1582.
    20. Kibrom A. ABAY & Bethelhem KORU & Gashaw Tadesse ABATE & Guush BERHANE, 2019. "How Should Rural Financial Cooperatives Be Best Organized? Evidence From Ethiopia," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(1), pages 187-215, March.
    21. Xiao-Min Yu & Ke Chen & Jin-Tong Liu, 2022. "Exploring How Organizational Capabilities Contribute to the Performance of Social Enterprises: Insights from China," Sustainability, MDPI, vol. 14(7), pages 1-20, April.
    22. Gayle, Philip G. & Harrison, Teresa D. & Thornton, Jeremy, 2017. "Entry, donor market size, and competitive conduct among nonprofit firms," International Journal of Industrial Organization, Elsevier, vol. 50(C), pages 294-318.
    23. Joaquín Morales Belpair, 2016. "Decentralized aid and democracy," Investigación & Desarrollo, Universidad Privada Boliviana, vol. 2(1), pages 5-17.

    More about this item

    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:ucp:ecdecc:doi:10.1086/682885. 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: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/EDCC .

    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.