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The Optimal NGO Chief: Strategic Delegation in Social Advocacy

Anthony Heyes () and Andreas Oestreich
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Anthony Heyes: Department of Economics, University of Ottawa

No 1701, Working Papers from Brock University, Department of Economics

Abstract: Firms face social pressure to behave well. We provide the first formal model in which social penalties for wrong-doing emerge endogenously and are jointly produced between a state regulator and an NGO. Armed with the instruments of coercion the regulator plays the primary role in information provision while through attitude-leadership the NGO manipulates the social atmosphere into which information about misbehavior of firms emerges. The strategies of the regulator and the NGO are classified in a taxonomy of regulatory settings that vary in; (a) the weight that the NGO places on environmen- tal versus business outcomes and (b) community alertness to NGO messaging. In the strategic setting that results an NGO funder will typically want to delegate his bidding to an NGO chief who has values di¤erent to his own.

Keywords: Environmental regulation; private politics; strategic delegation; NGOs; social license (search for similar items in EconPapers)
JEL-codes: D62 H83 L51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mic
Date: 2017-06
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