Goodwill bazaar: NGO competition and giving to development

Gani Aldashev and Thierry Verdier

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Abstract: This paper builds a model of competition through fundraising between horizontally differentiated NGOs. NGOs allocate their time resource between working on the project and fundraising, which attracts private donations. If the market size is fixed, the fundraising levels increase with the number of NGOs and the free-entry equilibrium number of NGOs can be larger or smaller than the socially optimal number, depending on the efficiency of the fundraising technology. If the market size is endogenous and NGOs cooperate in attracting new donors, fundraising levels decrease with the number of NGOs and the free-entry equilibrium number of NGOs is smaller than the one that maximizes the welfare of donors and beneficiaries. If NGOs can divert funds for private use, multiple equilibria (with high diversion and no diversion of funds) appear.

Keywords: NGOs; Monopolistic competition; Giving; Non-distribution constraint (search for similar items in EconPapers)
Date: 2010-01
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Citations: View citations in EconPapers (100)

Published in Journal of Development Economics, 2010, 91 (1), pp.48-63. ⟨10.1016/j.jdeveco.2008.11.010⟩

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Journal Article: Goodwill bazaar: NGO competition and giving to development (2010)
Working Paper: Goodwill bazaar: NGO competition and giving to development (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00754487

DOI: 10.1016/j.jdeveco.2008.11.010

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