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Location decisions and nongovernmental organization motivation : evidence from rural Bangladesh

  • Anna Fruttero
  • Varun Gauri

Nongovernmental organizations (NGOs) play an increasingly important role in development assistance, but little systematic evidence is available about their objectives and choices in developing countries. The authors develop two stylized accounts of NGO motivation: one in which donor contracts determine location decisions, and another in which altruistic motivations are the principal determinants. The authors then use data from the 1995 and 2000 rounds of the Bangladesh Households and Income and Expenditure Survey to analyze location decisions of NGO programs established between those two sample years. The data show that net change in a community's NGO program was unrelated to the community's need and that NGOs were ready to establish new programs in new areas without being concerned of duplicating the efforts of other NGOs. The findings suggest that contracts with donors, implicit or explicit, probably play a crucial role in determining the incentives that affect NGO program location choices.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3176.

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Date of creation: 01 Dec 2003
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Handle: RePEc:wbk:wbrwps:3176
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  1. Amin, S. & Rai, A.S. & Topa, G., 1999. "Does Microcredit Reach the Poor and Vulnerable? Evidence from Northern Bangldesh," Working Papers 99-06, C.V. Starr Center for Applied Economics, New York University.
  2. Stiles, Kendall, 2002. "International Support for NGOs in Bangladesh: Some Unintended Consequences," World Development, Elsevier, vol. 30(5), pages 835-846, May.
  3. Ravallion, Martin & Wodon, Quentin, 2000. "Banking on the Poor? Branch Location and Nonfarm Rural Development in Bangladesh," Review of Development Economics, Wiley Blackwell, vol. 4(2), pages 121-39, June.
  4. Zeller, Manfred & Sharma, Manohar & Ahmed, Akhter U. & Rashid, Shahidur, 2001. "Group-based financial institutions for the rural poor in Bangladesh: an institutional- and household-level analysis," Research reports 120, International Food Policy Research Institute (IFPRI).
  5. William Easterly, 2002. "The cartel of good intentions: The problem of bureaucracy in foreign aid," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 5(4), pages 223-250.
  6. Morduch, Jonathan, 1999. "The role of subsidies in microfinance: evidence from the Grameen Bank," Journal of Development Economics, Elsevier, vol. 60(1), pages 229-248, October.
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