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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.

Suggested Citation

  • Aldashev, Gani & Verdier, Thierry, 2007. "Internationalization of NGOs and Competition on Markets for Development Donations," CEPR Discussion Papers 6511, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:6511
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    References listed on IDEAS

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    1. 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.
    2. 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).
    3. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
    4. Susan Rose-Ackerman, 1982. "Charitable Giving and “Excessive†Fundraising," The Quarterly Journal of Economics, Oxford University Press, vol. 97(2), pages 193-212.
    5. 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.
    6. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
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    Cited by:

    1. Peter Nunnenkamp & Hannes Öhler, 2012. "Funding, Competition and the Efficiency of NGOs : An Empirical Analysis of Non‐charitable Expenditure of US NGOs Engaged in Foreign Aid," Kyklos, Wiley Blackwell, vol. 65(1), pages 81-110, February.
    2. repec:got:cegedp:109 is not listed on IDEAS

    More about this item

    Keywords

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

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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