•  
  •  
 

Journal of Undergraduate Research

Keywords

NGO, non-governmental organizations, foreign aid projects, NGO efficiency

College

Family, Home, and Social Sciences

Department

Political Science

Abstract

Billions of dollars each year are spent on foreign aid projects, much of which ends up in the hands of non-governmental organizations (NGOs) all around the world. NGOs are involved in many phases of development and have often accomplished great things; however, despite a long history of NGO work, there have been very few studies which consider the actual effectiveness of this process. In this study we hypothesize that because NGOs work outside of the traditional market, and because of a lack of accountability, there may be significant inefficiencies at the project level. To test this hypothesis, we perform a randomized controlled trial in Uganda wherein we measure the level of NGO efficiency by eliciting project cost estimates and comparing them to other cost level measures. This experiment is done primarily through e-mail. Our research demonstrates a surprising amount of inefficiency among NGOs; additional treatments indicate that this may be the result of opportunism caused by information asymmetry. We also demonstrate that correcting these inefficiencies via the introduction of simple accountability mechanisms is untenable. Anticipating such an outcome, we implement a second, similar, experiment using businesses as the subjects. This experiment will test whether an alternate, free-market distribution system corrects these inefficiencies. However, extremely low response rates indicate that there are additional issues which may prohibit businesses from effectively participating in development to the same degree as do NGOs.

Download

Share

COinS