Non-governmental organization
A non-governmental organization (NGO) (see spelling differences) is an organization that generally is formed independent from government.[2][3][4][5][6] They are typically nonprofit entities, and many of them are active in humanitarianism or the social sciences; they can also include clubs and associations that provide services to their members and others. NGOs can also be lobby groups for corporations, such as the World Economic Forum.[7][8][9][10] NGOs are distinguished from international and intergovernmental organizations (IOs) in that the latter are more directly involved with sovereign states and their governments.
"NGO" redirects here. For other uses, see NGO (disambiguation).
The term as it is used today was first introduced in Article 71 of the newly formed United Nations' Charter in 1945.[11] While there is no fixed or formal definition for what NGOs are, they are generally defined as nonprofit entities that are independent of governmental influence—although they may receive government funding.[11]
According to the UN Department of Global Communications, an NGO is "a not-for profit, voluntary citizen's group that is organized on a local, national or international level to address issues in support of the public good".[5] The term NGO is used inconsistently, and is sometimes used synonymously with civil society organization (CSO), which is any association founded by citizens.[12] In some countries, NGOs are known as nonprofit organizations while political parties and trade unions are sometimes considered NGOs as well.[13]
NGOs are classified by (1) orientation- entailing the type of activities an NGO undertakes, such as activities involving human rights, consumer protection, environmentalism, health, or development; and (2) level of operation, which indicates the scale at which an organization works: local, regional, national, or international.[13]
Russia had about 277,000 NGOs in 2008.[14] India is estimated to have had about 2 million NGOs in 2009 (approximately one per 600 Indians), many more than the number of the country's primary schools and health centers.[15][16] The United States, by comparison, has approximately 1.5 million NGOs.[17]
Structure[edit]
Staffing[edit]
Some NGOs rely on paid staff while others are based on volunteers. Although many NGOs use international staff in developing countries, others rely on local employees or volunteers. Foreign staff may satisfy a donor who wants to see the supported project managed by a person from an industrialized country. The expertise of these employees (or volunteers) may be counterbalanced by several factors, such as ; the cost of foreigners is typically higher, they have no grassroots connections in the country, and local expertise may be undervalued.[25] By the end of 1995, Concern Worldwide (an international anti-poverty NGO) employed 174 foreigners and just over 5,000 local staff in Haiti and ten developing countries in Africa and Asia.
On average, employees in NGOs earn 11-12% less compared to employees of for-profit organizations and government workers with the same number of qualifications .[27] However, in many cases NGOs employees receive more fringe benefits.[28]
History[edit]
International non-governmental organizations date back to at least the late 18th century,[55][56] and there were an estimated 1,083 NGOs by 1914.[57] International NGOs were important to the anti-slavery and women's suffrage movements, and peaked at the time of the 1932–1934 World Disarmament Conference.[58]
The term became popular with the 1945 founding of the United Nations in 1945;[59] Article 71 in Chapter X of its charter[60] stipulated consultative status for organizations which are neither governments nor member states.[61] An international NGO was first defined in resolution 288 (X) of the United Nations Economic and Social Council (ECOSOC) on February 27, 1950, as "any international organization that is not founded by an international treaty". The role of NGOs and other "major groups" in sustainable development was recognized in Chapter 27[62] of Agenda 21.[63] The rise and fall of international NGOs matches contemporary events, waxing in periods of growth and waning in times of crisis.[64] The United Nations gave non-governmental organizations observer status at its assemblies and some meetings. According to the UN, an NGO is a private, not-for-profit organization which is independent of government control and is not merely an opposition political party.[65]
The rapid development of the non-governmental sector occurred in Western countries as a result of the restructuring of the welfare state. Globalization of that process occurred after the fall of the communist system, and was an important part of the Washington Consensus.[31]
Twentieth-century globalization increased the importance of NGOs. International treaties and organizations, such as the World Trade Organization, focused on capitalist interests. To counterbalance this trend, NGOs emphasize humanitarian issues, development aid, and sustainable development. An example is the World Social Forum, a rival convention of the World Economic Forum held each January in Davos, Switzerland. The fifth World Social Forum, in Porto Alegre, Brazil in January 2005, was attended by representatives of over 1,000 NGOs.[66] The 1992 Earth Summit in Rio de Janeiro, attended by about 2,400 representatives, was the first to demonstrate the power of international NGOs in environmental issues and sustainable development. Transnational NGO networking has become extensive.[67]
Although NGOs are subject to national laws and practices, four main groups may be found worldwide:[68]
The Council of Europe drafted the European Convention on the Recognition of the Legal Personality of International Non-Governmental Organisations in Strasbourg in 1986, creating a common legal basis for European NGOs. Article 11 of the European Convention on Human Rights protects the right to associate, which is fundamental for NGOs.
Economic theory[edit]
The question whether a public project should be owned by an NGO or by the government has been studied in economics using the tools of the incomplete contracting theory. According to this theory, not every detail of a relationship between decision makers can be contractually specified. Hence, in the future, the parties will bargain with each other to adapt their relationship to changing circumstances. Ownership matters because it determines the parties' willingness to make non-contractible investments. In the context of private firms, Oliver Hart has shown that the party with the more important investment task should be owner.[69] Yet, Besley and Ghatak have argued that in the context of public projects the investment technology does not matter.[70]
Specifically, even when the government is the key investor, ownership by an NGO is optimal if and only if the NGO has a larger valuation of the project than the government. However, the general validity of this argument has been questioned by follow-up research. In particular, ownership by the party with the larger valuation need not be optimal when the public good is partially excludable,[71] when both NGO and government may be indispensable,[72] or when the NGO and the government have different bargaining powers.[73] Moreover, the investment technology can matter for the optimal ownership structure when there are bargaining frictions,[74] when the parties interact repeatedly[75] or when the parties are asymmetrically informed.[76]