Goodwill bazaar and NGO competition and giving to development
Journal of development economics, 2010, Vol. 91, No. 1, pp. 48-63
ALDASHEV, Gani, VERDIER, Thierry, Goodwill bazaar and NGO competition and giving to development, Journal of development economics, 2010, Vol. 91, No. 1, pp. 48-63 - https://hdl.handle.net/1814/40017
Retrieved from Cadmus, EUI Research Repository
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.
Cadmus permanent link: https://hdl.handle.net/1814/40017
Full-text via DOI: 10.1016/j.jdeveco.2008.11.010
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