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When NGOs go global: Competition on international markets for development donations

Author

Listed:
  • Gani Aldashev

    (FUNDP - Fondation Universitaire Notre Dame de la Paix - FUNDP - Facultés Universitaires Notre Dame de la Paix, CRED - Centre for Research on the Epidemiology of Disasters - Centre for Research on the Epidemiology of Disasters)

  • Thierry Verdier

    (PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, University of Southampton, CEPR - Center for Economic Policy Research)

Abstract

Why are many large non-governmental organizations (NGOs) becoming multinational entities? What are the welfare implications of this integration of markets for development donations? To answer these questions, we build a simple two-country model with horizontally differentiated NGOs competing in fundraising. We find that NGOs become multinational if the economies of scale in fundraising are sufficiently large. In that case, national NGOs in the smaller country disappear, while some national NGOs remain in the larger country only if country sizes are sufficiently different. Social welfare is higher in the regime with multinationals than under autarky.

Suggested Citation

  • Gani Aldashev & Thierry Verdier, 2009. "When NGOs go global: Competition on international markets for development donations," Post-Print halshs-00754327, HAL.
    • Handle: RePEc:hal:journl:halshs-00754327
    DOI: 10.1016/j.jinteco.2009.07.007
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    Keywords

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    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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