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

Aldashev, G, Jaimovich, E and Verdier, T (2016) Small is Beautiful: Motivational Allocation in the Non-Profit Sector [Working Paper]

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We build an occupational-choice general-equilibrium model with for-pro t rms, non-pro torganizations and endogenous private warm-glow donations. Lack of monitoring on the use offunds implies that an increase of funds of the non-pro t sector (because of a higher incomein the for-pro t sector, a stronger preference for giving, or an inow of foreign aid) worsensthe motivational composition and performance of the non-pro t sector. We also analyze theconditions under which donors (through linking donations to the motivational composition of thenon-pro t sector), non-pro ts themselves (through peer monitoring), or the government (usinga tax- nanced public funding of non-pro ts) can eliminate the low-e¤ectiveness equilibrium. Wepresent supporting case-study evidence from humanitarian emergencies and developing-countryNGOs.

Item Type: Working Paper
Subjects : Economics
Authors :
Aldashev, G
Verdier, T
Date : January 2016
Uncontrolled Keywords : Non-profi�t organizations, Charitable giving, Altruism, Occupational choice, Foreign aid
Related URLs :
Depositing User : Symplectic Elements
Date Deposited : 16 May 2017 15:39
Last Modified : 18 May 2017 13:14

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