Do Better-Performing Nongovernmental Organizations Report More Accurately? Evidence from Financial Accounts in Uganda

Burger, Ronelle; Dang, Canh Thien; Owens, Trudy

Abstract

We use Benford’s Law to investigate inaccurate financial reports of a representative sample of Ugandan nongovernmental organizations (NGOs). We find that 25% of the sample provided information that did not conform to the Benford distribution, suggesting potential misreporting. NGOs with better ratings from their beneficiaries are more likely to submit credible information. This contradicts the belief that upward accountability demands crowd out serving the client community. The decision to withhold requested information is unrelated to the decision to report inaccurately, with the latter attributed to limited capacity and skills. Policies should provide larger roles for beneficiary-based assessments and increased support for bookkeeping activities.

Citation

Burger, R., Dang, C. T., & Owens, T. (2021). Do Better-Performing Nongovernmental Organizations Report More Accurately? Evidence from Financial Accounts in Uganda. Economic Development and Cultural Change, 69(2), 789-828. https://doi.org/10.1086/703099

• Journal Article Type: Article
• Acceptance Date: Feb 15, 2019
• Online Publication Date: Nov 10, 2020
• Publication Date: Jan 1, 2021
• Deposit Date: Mar 8, 2019
• Publicly Available Date: Mar 8, 2019
• Journal: Economic Development and Cultural Change
• Print ISSN: 0013-0079
• Electronic ISSN: 1539-2988
• Publisher: University of Chicago Press
• Peer Reviewed: Peer Reviewed
• Volume: 69
• Issue: 2
• Pages: 789-828
• DOI: https://doi.org/10.1086/703099
• Keywords: Economics and Econometrics; Development
• Public URL: https://nottingham-repository.worktribe.com/output/1620840
• Publisher URL: https://www.journals.uchicago.edu/doi/abs/10.1086/703099?journalCode=edcc
• Contract Date: Mar 8, 2019