DECENTRALIZED AID AND DEMOCRACY

Authors

  • Joaquín Morales Belpaire Universidad Privada Boliviana

Keywords:

Private Development Assistance, Democracy, Governance, NGOs, Nonprofits, Foreign Aid, Taxation, Public Goods

Abstract

This paper uses a model of vote over public finances to show that when nongovernmental organisations deliver development aid, beneficiaries have incentives to reduce electoral support for state-led redistribution. As a result, NGOs can crowd out governmental spending, turning private aid into a negative externality for the poor who do not directly benefit from it. I model the choice of a representative NGO, which faces a trade-off between targeting beneficiaries with higher needs, and reducing costs. I characterize the conditions under which this targeting affects the size of the externality and describe how it affects the welfare of beneficiaries and non-beneficiaries.

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Published

2017-02-01

How to Cite

Morales Belpaire, J. (2017). DECENTRALIZED AID AND DEMOCRACY. Revista Investigación &Amp; Desarrollo, 2(16). Retrieved from https://www1.upb.edu/revista-investigacion-desarrollo/index.php/id/article/view/143

Issue

Vol. 2 No. 16 (2016)

Section

Economía, Empresa y Sociedad

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