A model of nongovernmental organization regulation with an application to Uganda

Burger, Ronelle and Dasgupta, Indraneel and Owens, Trudy (2015) A model of nongovernmental organization regulation with an application to Uganda. Economic Development and Cultural Change, 64 (1). pp. 71-111. ISSN 1539-2988

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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.

Item Type: Article
RIS ID: https://nottingham-repository.worktribe.com/output/981766
Schools/Departments: University of Nottingham, UK > Faculty of Social Sciences > School of Economics
Identification Number: https://doi.org/10.1086/682885
Depositing User: Eprints, Support
Date Deposited: 07 Nov 2016 08:46
Last Modified: 04 May 2020 20:06
URI: https://eprints.nottingham.ac.uk/id/eprint/38533

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