NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Erika Deserranno

Northwestern University

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Institutional Affiliation: Northwestern University

NBER Working Papers and Publications

April 2020Aid Crowd-Out: The Effect of NGOs on Government-Provided Public Services
with Aisha Nansamba, Nancy Qian: w26928
We document that in poor rural communities where government workers provide basic health services, the entry of an NGO that aims to provide similar services reduces the supply of government workers and total services. This is consistent with the NGO providing the combination of higher pay and stronger incentives for commercial activities. The decline in health services is most pronounced in villages where the NGO hires the government worker, where there is also an increase in infant mortality. In villages without any health worker beforehand, NGO entry unambiguously increases health services and reduces infant mortality.
 
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