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The Rise of NGO Activism

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  • Julien Daubanes
  • Jean-Charles Rochet

Abstract

Activist nongovernmental organizations (NGOs) increasingly oppose firms' practices. We suggest this might be related to the vulnerability of public regulation to corporate influence. We examine a potentially harmful industrial project subject to regulatory approval. Under industry influence, the regulator may approve the project even though it is harmful. However, an NGO may oppose it. We characterize the circumstances under which NGO opposition occurs and under which it is socially beneficial. Our theory explains the role that NGOs have assumed in the last decades, and has implications for the social legitimacy of activism and the appropriate degree of transparency of industrial activities.

Suggested Citation

  • Julien Daubanes & Jean-Charles Rochet, 2019. "The Rise of NGO Activism," American Economic Journal: Economic Policy, American Economic Association, vol. 11(4), pages 183-212, November.
  • Handle: RePEc:aea:aejpol:v:11:y:2019:i:4:p:183-212
    Note: DOI: 10.1257/pol.20180027
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    Cited by:

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    2. Ambec, Stefan & De Donder, Philippe, 2022. "Environmental policy with green consumerism," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).
    3. Espinosa, Romain & Treich, Nicolas, 2020. "Moderate vs. Radical NGOs," TSE Working Papers 20-1159, Toulouse School of Economics (TSE).
    4. Fabien Prieur & Benteng Zou, 2017. "On the impact of indirect competition for political influence on environmental policy," DEM Discussion Paper Series 17-16, Department of Economics at the University of Luxembourg.
    5. Nicolas Treich, 2018. "Veganomics : vers une approche économique du véganisme ?," Revue française d'économie, Presses de Sciences-Po, vol. 0(4), pages 3-48.
    6. Pamina Koenig & Sandra Poncet, 2019. "Reputation and (un)fair trade: Effects on French importers from the Rana Plaza collapse," Post-Print halshs-02350112, HAL.
    7. Prieur, Fabien & Zou, Benteng, 2018. "Climate politics: How public persuasion affects the trade-off between environmental and economic performance," Mathematical Social Sciences, Elsevier, vol. 96(C), pages 63-72.
    8. Meisinger, Norman, 2022. "A tragedy of intangible commons: Riding the socioecological wave," Ecological Economics, Elsevier, vol. 193(C).
    9. Daniel Cardona & Jenny De Freitas & Antoni Rubí-Barceló, 2021. "Environmental policy contests: command and control versus taxes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(3), pages 654-684, June.

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    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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