A Model of Ngo Regulation with an Application to Uganda

24 Pages Posted: 31 Dec 2011

See all articles by Ronelle Burger

Ronelle Burger

Stellenbosch University

Indraneel Dasgupta

Durham University - Department of Economics and Finance; IZA Institute of Labor Economics

Trudy Owens

University of Nottingham - School of Economics

Abstract

We develop a model of regulation of service-delivery 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.

Keywords: regulation of non-governmental organizations, developing countries, Uganda

JEL Classification: G18, L31

Suggested Citation

Burger, Ronelle and Dasgupta, Indraneel and Owens, Trudy, A Model of Ngo Regulation with an Application to Uganda. IZA Discussion Paper No. 6221, Available at SSRN: https://ssrn.com/abstract=1977807 or http://dx.doi.org/10.2139/ssrn.1977807

Ronelle Burger (Contact Author)

Stellenbosch University ( email )

Private Bag X1
Matieland, 7602
South Africa

Indraneel Dasgupta

Durham University - Department of Economics and Finance ( email )

Durham, DH1 3HY
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Trudy Owens

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
103
Abstract Views
715
Rank
469,855
PlumX Metrics