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Title: Brothers in Alms? Coordination between NGOs on Markets for Development Donations
Author(s): Gani Aldashev, Marco Marini and Thierry Verdier
Publication Date: November 2010
Keyword(s): coordination, endogenous coalition formation, giving, NGOs and non-distribution constraint
Programme Area(s): Development Economics and Public Economics
Abstract: This paper studies the stability of coordination between mission-driven non-governmental organizations (NGOs) competing for donations. We build a non-cooperative game-theoretic model of alliance formation between NGOs that compete through fundraising activities and impose externalities on each others? output. We derive general results on the stability of full coordination under two classes of alliance-formation rules: unanimity and aggregative. If fundraising activities are strategic complements, the grandcoalition (i.e. full coordination) is always individually stable and, under the unanimity rule, coalitionally stable. When fundraising activities are strategic substitutes, the grandcoalition can be unstable and the instability is more likely, the steeper are NGOs? (negatively sloped) best-reply functions. Under the aggregative rule, the grandcoalition is stable: (i) individually, if there are negative coalitional externalities; (ii) coalitionally, if breaking an alliance requires the majority of NGOs involved in the alliance.
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Bibliographic Reference
Aldashev, G, Marini, M and Verdier, T. 2010. 'Brothers in Alms? Coordination between NGOs on Markets for Development Donations'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=8109