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When NGOs Go Global: Competition on International Markets for Development Donations

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  • Gani Aldashev
  • Thierry Verdier

Abstract

Why many large non-governmental organizations (NGOs) are becoming multinational entities? What are the welfare implications of this integration of markets for development donations? To answer these questions, we build a simple two-country model with horizontally differentiated NGOs competing through fundraising effort. We find that NGOs become multinational if the economies of scale in fundraising are sufficiently large. In that case, national NGOs in the smaller country disappear, while some national NGOs remain in the larger country only if the difference in the countries' size is large enough. Social welfare is higher in the regime with multinationals than under autarky.

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Bibliographic Info

Paper provided by Collegio Carlo Alberto in its series Carlo Alberto Notebooks with number 93.

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Length: 39 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:cca:wpaper:93

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Keywords: non-governmental organizations; charitable giving; globalization; multinational firms;

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  1. Grossman, Gene M & Shapiro, Carl, 1984. "Informative Advertising with Differentiated Products," Review of Economic Studies, Wiley Blackwell, vol. 51(1), pages 63-81, January.
  2. Eric Werker & Faisal Z. Ahmed, 2008. "What Do Nongovernmental Organizations Do?," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 73-92, Spring.
  3. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
  4. Anna Fruttero & Varun Gauri, 2005. "The Strategic Choices of NGOs: Location Decisions in Rural Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 41(5), pages 759-787.
  5. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
  6. James Andreoni & A. Abigail Payne, 2003. "Do Government Grants to Private Charities Crowd Out Giving or Fund-raising?," American Economic Review, American Economic Association, vol. 93(3), pages 792-812, June.
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Cited by:
  1. Lionel Fontagné & Michela Limardi, 2011. "The Outcome of NGOs' Activism in Developing Countries under Visibility Constraint," PSE Working Papers halshs-00630096, HAL.
  2. Gani Aldashev & Marco Marini & Thierry Verdier, 2014. "Brothers in Alms? Coordination Betwen Nonprofits on Markets for Donations," Working Papers 1406, University of Namur, Department of Economics.
  3. repec:aeg:report:2014-2 is not listed on IDEAS
  4. Navarra, Cecilia & Vallino, Elena, 2014. "Who had the idea to build up a village organization? Some evidence from Senegal and Burkina Faso," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201407, University of Turin.
  5. repec:hal:wpaper:halshs-00630096 is not listed on IDEAS
  6. Michela Limardi, 2011. "The Ambiguous Outcome of NGOs’ Activism in Developing Countries," ERSA conference papers ersa11p555, European Regional Science Association.
  7. Gani Aldashev & Michela Limardi & Thierry Verdier, 2013. "Watchdogs of the Invisible Hand: NGO Monitoring, Corporate Social Responsibility, and Industry Equilibrium," Working Papers 1404, University of Namur, Department of Economics.

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