A Model of NGO Regulation with an Application to Uganda
AbstractWe develop a model of regulation of service-delivery 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.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6221.
Length: 24 pages
Date of creation: Dec 2011
Date of revision:
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Other versions of this item:
- 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.
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
- L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-01-10 (All new papers)
- NEP-DEV-2012-01-10 (Development)
- NEP-REG-2012-01-10 (Regulation)
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