The Reputation Trap of Ngo Accountability
Abstract: The management of nongovernmental organizations (NGOs) has emerged as an important problem in recent years. Much of the discussion about NGO management has centered around the need for accountability. We demonstrate that the tools typically used by donors to improve NGO accountability, namely reporting and shorter funding cycles, can trigger unintended consequences. Our analysis shows that demonstrating attribution within the constraints of a short funding cycle can become so important to the survival of the NGO that it interferes with the long-term policy goals of the organization. The resulting short-term NGO behavior is often misconstrued as incompetence, but it is actually motivated by the structural constraints of the relationship with donors. Whenever an NGO has to choose between actions that generate attributable outcomes versus actions that will not lead to attribution, the NGO is likely to choose the former, even when the latter choice would have a more durable policy impact. We illustrate this strategic dynamic with a focus on two types of NGO activity: water improvement and international crisis mediation.
