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 Stellenbosch University, Department of Economics in its series Working Papers with number 22/2011.
Date of creation: 2011
Date of revision:
Regulation of non-governmental organizations; developing countries; Uganda;
Other versions of this item:
- Burger, Ronelle & Dasgupta, Indraneel & Owens, Trudy, 2011. "A Model of NGO Regulation with an Application to Uganda," IZA Discussion Papers 6221, Institute for the Study of Labor (IZA).
- I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs
- L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
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