Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
What Do Nongovernmental Organizations Do?
Journal of Economic Perspectives
vol. 22,
no. 2, Spring 2008
(pp. 73–92)
(Complimentary)
Abstract
Nongovernmental organizations are one group of players who are active in the efforts of international development and increasing the welfare of poor people in poor countries. Nongovernmental organizations are largely staffed by altruistic employees and volunteers working towards ideological, rather than financial, ends. Their founders are often intense, creative individuals who sometimes come up with a new product to deliver or a better way to deliver existing goods and services. They are funded by donors, many of them poor or anonymous. Yet these attributes should not be unfamiliar to economists. Development NGOs, like domestic nonprofits, can be understood in the framework of not-for-profit contracting. It is easy to conjure up a glowing vision of how the efforts of NGOs could focus on problem solving without getting bogged down in corruption or bureaucracy. But the strengths of the NGO model have some corresponding weaknesses -- in agenda setting, decision making, and resource allocation. We highlight three factors in explaining the increased presence of NGOs in the last few decades: a trend towards more outsourcing of government services; new ventures by would-be not-for-profit "entrepreneurs"; and the increasing professionalization of existing NGOs.Citation
Werker, Eric, and Faisal Z. Ahmed. 2008. "What Do Nongovernmental Organizations Do?" Journal of Economic Perspectives, 22 (2): 73–92. DOI: 10.1257/jep.22.2.73JEL Classification
- F35 Foreign Aid
- L31 Nonprofit Institutions; NGOs
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