Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) LSE RSS Contact Us YouTube Twitter


Development Economics Paper
The Economics of Non-Governmental Organisations.
R. Hopkins and C.D. Scott
May 1999
Paper No' DEDPS 15:
Full Paper (pdf)

Tags: miroeconomic analyses of economic development; formal and informal sectors; non-governmental organisations; institutional arrangements; non-profit institutions; altruism

The purpose of this paper is to identify the organisational comparative advantage of NGOs, and to develop a model which explains the set of circumstances uder which they emerge and dominate other types of firms. It is argued that the potential superiority of NGOs derives from two features: (1) the creation of an institutional environment within the firm which selectively attracts altruists, who have a lower supply price of effective labour than egotists, and (2) the ability to develop efficient technologies for converting the relevatory and productive effort of their staff into local outputs which are highly valued by the target group of beneficiaries.