A model of nongovernmental organization regulation with an application to Uganda

Burger, Ronelle; Dasgupta, Indraneel; Owens, Trudy

Abstract

We develop a model of regulation of service-delivery nongovernmental organizations (NGOs), where future grants are conditional on prior spending of some minimal proportion of current revenue on direct project-related expenses. Such regulation induces some NGOs to increase current project spending but imposes wasteful costs of compliance verification on all NGOs. Under a large class of parametric configurations, we find that regulation increases total discounted project expenditure over a regime of no regulation, when verification costs constitute no more than 15% of initial revenue. We characterize the optimal regulatory policy under these configurations. We apply our analysis to a large sample of NGOs from Uganda and find regulation to be beneficial in that context.

Citation

Burger, R., Dasgupta, I., & Owens, T. (2015). A model of nongovernmental organization regulation with an application to Uganda. Economic Development and Cultural Change, 64(1), https://doi.org/10.1086/682885

• Journal Article Type: Article
• Acceptance Date: Jul 20, 2015
• Publication Date: Oct 1, 2015
• Deposit Date: Nov 7, 2016
• Publicly Available Date: Nov 7, 2016
• Journal: Economic Development and Cultural Change
• Print ISSN: 0013-0079
• Electronic ISSN: 1539-2988
• Publisher: University of Chicago Press
• Peer Reviewed: Peer Reviewed
• Volume: 64
• Issue: 1
• DOI: https://doi.org/10.1086/682885
• Public URL: http://eprints.nottingham.ac.uk/id/eprint/38533
• Publisher URL: http://www.journals.uchicago.edu/doi/10.1086/682885
• Copyright Statement: Copyright information regarding this work can be found at the following address: http://eprints.nottingham.ac.uk/end_user_agreement.pdf