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Bringin? Home the Curry and Givin? it away: Commercial Ventures of NGOs in Bangladesh

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  • LY, Pierre-Emmanuel

Abstract

From handicraft shops to cyber cafés, more and more NGOs in developing countries are moving toward investment in revenue-generating business ventures. This paper explores the motivations behind such investments and their impact the donor-NGO relationship. First, a case study of NGOs in Bangladesh provides evidence of NGOs? commercial earnings in the country. Then, a simple theoretical model underlines three determinants of an NGO's decision to invest in business: the uncertainty of future donor funding; the lack of funds available; and the need to finance expenditures that donors do not value. Furthermore, facing uncertainty regarding their ability to renew future commitment, donors might prefer NGOs with business ventures. Finally, the analysis shows that having an independent income does not necessarily make NGOs better off.

Suggested Citation

  • LY, Pierre-Emmanuel, 2006. "Bringin? Home the Curry and Givin? it away: Commercial Ventures of NGOs in Bangladesh," Proceedings of the German Development Economics Conference, Berlin 2006 19, Verein für Socialpolitik, Research Committee Development Economics.
  • Handle: RePEc:zbw:gdec06:4742
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    References listed on IDEAS

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    1. Azam, Jean-Paul & Laffont, Jean-Jacques, 2003. "Contracting for aid," Journal of Development Economics, Elsevier, vol. 70(1), pages 25-58, February.
    2. Glaeser, Edward L. & Shleifer, Andrei, 2001. "Not-for-profit entrepreneurs," Journal of Public Economics, Elsevier, vol. 81(1), pages 99-115, July.
    3. Timothy Besley & Maitreesh Ghatak, 2005. "Competition and Incentives with Motivated Agents," American Economic Review, American Economic Association, vol. 95(3), pages 616-636, June.
    4. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    5. Timothy Besley & Maitreesh Ghatak, 2001. "Government Versus Private Ownership of Public Goods," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1343-1372.
    6. Stiles, Kendall, 2002. "International Support for NGOs in Bangladesh: Some Unintended Consequences," World Development, Elsevier, vol. 30(5), pages 835-846, May.
    7. repec:hrv:faseco:33078971 is not listed on IDEAS
    8. Jack, William, 2001. "Public policy toward nongovernmental organizations in developing countries," Policy Research Working Paper Series 2639, The World Bank.
    9. Jean--Paul Azam, 2003. "A Theory of Poverty Aversion and Civil Society Development," Economics and Politics, Wiley Blackwell, vol. 15(1), pages 61-84, March.
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