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Internationalization of NGOs and Competition on Markets for Development Donations

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  • Aldashev, Gani
  • Verdier, Thierry

Abstract

What are the effects of the integration of markets for private donations for development on NGOs’ performance? How is the welfare of donors and beneficiaries affected? To answer these questions, we build a model of a market for development donations with horizontally differentiated NGOs competing by fundraising effort. We compare three regimes: autarky, full integration, and the regime of multinational NGOs (in which NGOs have to establish foreign affiliates to raise funds abroad). The welfare impact of market integration depends on the interplay between three factors: returns to scale in the NGO production technology, donors’ "taste for variety", and the effectiveness of aggregate fundraising in motivating new donors.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6511.

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Date of creation: Oct 2007
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Handle: RePEc:cpr:ceprdp:6511

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Related research

Keywords: internationalization; monopolistic competition; NGOs; non-distribution constraint;

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References

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  1. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
  2. Rose-Ackerman, Susan, 1982. "Charitable Giving and "Excessive" Fundraising," The Quarterly Journal of Economics, MIT Press, vol. 97(2), pages 193-212, May.
  3. 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.
  4. 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.
  5. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
  6. PESTIEAU, Pierre & SATO, Motohiro, 2006. "Limiting the number of charities," CORE Discussion Papers 2006074, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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Cited by:
  1. Peter Nunnenkamp & Hannes Öhler, 2010. "Funding, Competition and the Efficiency of NGOs: An Empirical Analysis of Non-charitable Expenditure of US NGOs Engaged in Foreign Aid," Kiel Working Papers 1640, Kiel Institute for the World Economy.

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