Discussion Paper Details

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Title: Internationalization of NGOs and Competition on Markets for Development Donations

Author(s): Gani Aldashev and Thierry Verdier

Publication Date: October 2007

Keyword(s): internationalization, monopolistic competition, NGOs and non-distribution constraint

Programme Area(s): Development Economics and International Trade and Regional Economics

Abstract: What are the effects of the integration of markets for private donations for development on NGOs? performance? How is the welfare of donors and beneficiaries affected? To answer these questions, we build a model of a market for development donations with horizontally differentiated NGOs competing by fundraising effort. We compare three regimes: autarky, full integration, and the regime of multinational NGOs (in which NGOs have to establish foreign affiliates to raise funds abroad). The welfare impact of market integration depends on the interplay between three factors: returns to scale in the NGO production technology, donors? "taste for variety", and the effectiveness of aggregate fundraising in motivating new donors.

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Bibliographic Reference

Aldashev, G and Verdier, T. 2007. 'Internationalization of NGOs and Competition on Markets for Development Donations'. London, Centre for Economic Policy Research.