EconPapers    
Economics at your fingertips  
 

Control and efficiency in the nonprofit sector: Evidence from a randomized policy experiment

Niklas Bengtsson () and Per Engstrom

Natural Field Experiments from The Field Experiments Website

Abstract: Results in behavioral economics suggest that material incentives can crowd out effort, if agents are mission-oriented rather than self-interested. We test this prediction on a sample of nonprofit organizations in Sweden. Swedish nonprofit organizations receive tax funds annually to promote global development issues through information campaigns. Traditionally, the contract with the main principal (the Swedish foreign aid agency) has been based on trust and self-regulation. We designed an experimental policy intervention, effectively replacing the trust-based contract with an increased level of monitoring from the principal, along with a threat to cut future funds if irregularities were detected. Our findings are inconsistent with (strong) motivational crowd-out. Overall, using both self-reported and observed measures of outreach, we find that the intervention improved efficiency. Graphical analysis shows that non-monitored organizations exhibit a distinct tendency to maximize expenditure; in contrast, organizations in the treatment group are more likely to return unused grants to Sida. Additionally, we find no crowding out of private contributions and no evidence of a "discouraged NGO"-syndrome.

Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://s3.amazonaws.com/fieldexperiments-papers2/papers/00316.pdf

Related works:
Working Paper: Control and Efficiency in the Nonprofit Sector: Evidence from a Randomized Policy Experiment (2011) Downloads
Working Paper: Control and Efficiency in the Nonprofit Sector Evidence from a Randomized Policy Experiment (2011) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:feb:natura:00316

Access Statistics for this paper

More papers in Natural Field Experiments from The Field Experiments Website
Bibliographic data for series maintained by Joe Seidel ().

 
Page updated 2020-10-26
Handle: RePEc:feb:natura:00316