Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/58442
Authors: 
Burger, Ronelle
Dasgupta, Indraneel
Owens, Trudy
Year of Publication: 
2011
Series/Report no.: 
Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6221
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.
Subjects: 
regulation of non-governmental organizations
developing countries
Uganda
JEL: 
G18
L31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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