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Small is Beautiful: Motivational Allocation in the Non-Profit Sector

Aldashev, G, Jaimovich, E and Verdier, T (2017) Small is Beautiful: Motivational Allocation in the Non-Profit Sector Journal of the European Economic Association, 16 (3). pp. 730-780.

20170621_191916_ALDASHEV_JAIMOVICH_VERDIER.pdf - Accepted version Manuscript

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We build an occupational-choice general-equilibrium model with for-profit firms, non-profit organizations and endogenous private warm-glow donations. Lack of monitoring on the use of funds implies that an increase of funds of the non-profit sector (because of a higher incomein the for-profit sector, a stronger preference for giving, or an inflow of foreign aid) worsens the motivational composition and performance of the non-profit sector. We also analyze the conditions under which donors (through linking donations to the motivational composition of the non-profit sector), non-profits themselves (through peer monitoring), or the government (using a tax-financed public funding of non-profits) can eliminate the low-effectiveness equilibrium. We present supporting case-study evidence from humanitarian emergencies and developing-country NGO sector and humanitarian emergencies.

Item Type: Article
Subjects : Economics
Divisions : Faculty of Arts and Social Sciences > School of Economics
Authors :
Aldashev, G
Verdier, T
Date : 14 November 2017
DOI : 10.1093/jeea/jvx024
Copyright Disclaimer : © The Authors 2017. Published by Oxford University Press on behalf of European Economic Association. This is a pre-copyedited, author-produced version of an article accepted for publication in Journal of the European Economic Association following peer review. The version of record Gani Aldashev, Esteban Jaimovich, Thierry Verdier; Small is Beautiful: Motivational Allocation in the Nonprofit Sector, Journal of the European Economic Association, Volume 16, Issue 3, 1 June 2018, Pages 730–780, is available online at:
Uncontrolled Keywords : Non-profit organizations, Charitable giving, Altruism, Occupational choice, Foreign aid
Related URLs :
Depositing User : Symplectic Elements
Date Deposited : 16 May 2017 15:39
Last Modified : 15 Nov 2019 02:08

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