A Model of NGO Regulation with an Application to Uganda

Ronelle Burger (), Indraneel Dasgupta () and Trudy Owens

No 22/2011, Working Papers from Stellenbosch University, Department 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 (search for similar items in EconPapers)
JEL-codes: I38 L31 L38 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-reg
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Citations: View citations in EconPapers (4)

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Working Paper: A Model of NGO Regulation with an Application to Uganda (2011)
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