THE SCOPE OF NGOS AND DEVELOPMENT PROGRAMME DESIGN: APPLICATION TO PROBLEMS OF MULTIDIMENSIONAL POVERTY
| Published date | 01 October 2012 |
| DOI | http://doi.org/10.1002/pad.1635 |
| Author | Stephen C. Smith |
| Date | 01 October 2012 |
THE SCOPE OF NGOS AND DEVELOPMENT PROGRAMME DESIGN:
APPLICATION TO PROBLEMS OF MULTIDIMENSIONAL POVERTY
STEPHEN C. SMITH*
,†
George Washington University, USA
SUMMARY
In this study, basic questions concerning the scope and structure of organisations working on development and poverty activities
are addressed. Under what conditions is work on many or few poverty problems by a single organisation warranted? Moreover,
for a given organisational scope, how many issues and in what combinations are best in a specificprogramme? How are these
choices related? How does ‘inheriting’an organisational structure, that is difficult (very costly) to change, influence choices
concerning programme type? The application of the economics of organisation yields useful insights into non-governmental
organisation (NGO) structure and activities, revealing opposing forces that may lead NGOs to diversify either excessively, or
inadequately. NGOs working in the poverty field are a natural focus for this research because poverty is a multidimensional
problem with potential (or contingent) complementarities across dimensions. Perspectives on activity choices such as child
sponsorship and microfinance emerge from this broader context. Copyright © 2012 John Wiley & Sons, Ltd.
key words—poverty; development; economics of organisation; organisational comparative advantage; NGOs; economies of
scope; microfinance; integration; specialisation
JEL Codes: O10, O19, L22, L25, L31, D20, I38
INTRODUCTION
In this paper, the internal structure of organisations whose goals are to encourage economic development and
reduce poverty is considered. It is now broadly understood that poverty is multidimensional in character; the
Human Development Index, introduced in 1990, recognises the role of health and education in addition to
consumption; and the Multidimensional Poverty Index, introduced in 2010, explicitly accounts for complementa-
rities across dimensions of health, education, and several key assets (UNDP, 2010; Alkire and Foster, 2011). But,
should organisations and their programmes working to ameliorate poverty themselves be multidimensional?
Very basic questions are addressed in the analysis. Under what conditions does an NGO—in particular a
poverty and development-oriented organisation—work on relatively many or few topics, and potentially in which
combinations? This basic ‘positive’question, investigating why such organisations behave as they do, is a founda-
tion of the analysis. But the perspective of social welfare is also introduced as a basic problem for future research:
why and under what conditions may the resulting behaviour differ from that which would be chosen by the
hypothetical ‘social planner’, and what may be done about any deviations? Moreover, for any given scope of
the organisation’swork, the second core question is as follows: for what reasons do single programmes address
few or many issues or in what combinations? Again, when may the answer deviate from efficiency?
Arguments are illustrated primarily with organisations and programmes that engage in microfinance activities,
either alone or in combination with other activities (such as offering business training, provision of maternal and
child health care, improving water access, literacy courses, or non-formal education for children). Child sponsorship
*Correspondence to: S. C. Smith, Department of Economics 306 Monroe Hall, 2115 G St NW, George Washington University, Washington, DC
20052, USA. E-mail: ssmith@gwu.edu
†
A draft of this paper was presented at the ‘Symposium on Governance and the Eradication of Poverty: New Perspectives from Multidisciplinary
Analysis,’20–22 October 2011, Yonsei University, South Korea (via videoconferencing).
public administration and development
Public Admin. Dev. 32, 357–370 (2012)
Published online in Wiley Online Library
(wileyonlinelibrary.com) DOI: 10.1002/pad.1635
Copyright © 2012 John Wiley & Sons, Ltd.
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