A model of nongovernmental organization regulation with an application to UgandaTools Burger, Ronelle, 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 Full text not available from this repository.
Official URL: http://www.journals.uchicago.edu/doi/10.1086/682885
AbstractWe 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.
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