Internationalization of NGOs and Competition on Markets for Development Donations

30 Pages Posted: 9 Oct 2007

See all articles by Gani Aldashev

Gani Aldashev

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES); University of Namur

Thierry Verdier

Paris School of Economics (PSE); Pontifical Catholic University of Rio de Janeiro (PUC-Rio) - Department of Economics; Centre for Economic Policy Research (CEPR)

Date Written: October 2007

Abstract

What are the effects of the integration of markets for private donations for development on NGOs' performance? How is the welfare of donors and beneficiaries affected? To answer these questions, we build a model of a market for development donations with horizontally differentiated NGOs competing by fundraising effort. We compare three regimes: autarky, full integration, and the regime of multinational NGOs (in which NGOs have to establish foreign affiliates to raise funds abroad). The welfare impact of market integration depends on the interplay between three factors: returns to scale in the NGO production technology, donors' taste for variety, and the effectiveness of aggregate fundraising in motivating new donors.

Keywords: internationalization, monopolistic competition, NGOs, non-distribution constraint

JEL Classification: F12, F23, L31

Suggested Citation

Aldashev, Gani and Aldashev, Gani and Verdier, Thierry, Internationalization of NGOs and Competition on Markets for Development Donations (October 2007). CEPR Discussion Paper No. 6511, Available at SSRN: https://ssrn.com/abstract=1020234

Gani Aldashev (Contact Author)

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium

University of Namur ( email )

8 rempart de la vierge
Namur, 5000
Belgium

Thierry Verdier

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014
France

Pontifical Catholic University of Rio de Janeiro (PUC-Rio) - Department of Economics ( email )

Rua Marques de Sao Vicente, 225/206F
Rio de Janeiro, RJ 22453
Brazil

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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