Governance and Political Economy

Incentivizing NGOs: A Field Experiment in Pakistan

Project members:
Hamna Ahmed, Lahore School of Economics
Simon Quinn, University of Oxford
Kate Vyborny, Duke University
RAs: Ahsan Ansari, Pakistan Poverty Alleviation Fund (PPAF)
Abbas Raza, Pakistan Poverty Alleviation Fund (PPAF)
Salman Khalid, Pakistan Poverty Alleviation Fund (PPAF)
SaheemKhizer, United Nations Development Programme (UNDP)
Shahmir-ul-Haq, Pakistan Poverty Alleviation Fund (PPAF)
Yushma Umar, Pakistan Poverty Alleviation Fund (PPAF)

This research is funded by the Pakistan Poverty Alleviation Fund (PPAF), International Growth Centre (IGC) and National Science Foundation (NSF). Donors and developing country governments have experimented with alternative ways to deliver services and assistance to communities and to individuals. One such approach is to deliver funding for basic services through non-governmental organisations. Incentive issues have been studied extensively in government bureaucracies. However, similar issues also arise when public spending is channelled through the non-government sector, which may reduce state effectiveness in policy delivery; yet there is very little research on these issues. In addition, we know very little about how public spending through non-government organisations affects service delivery through the traditional bureaucracy. Under what circumstances does it complement or bolster mainstream public service delivery, providing information or exerting citizen pressure on the government? Under what circumstances does it “let government off the hook,” substituting for services that would have been provided by the state? We collaborate with Pakistan Poverty Alleviation Fund (PPAF) to study these issues through a randomized control trial (RCT). PPAF receives support from both donor and Pakistani government sources, and funds local volunteer-run NGOs across Pakistan to provide public services in a wide range of sectors. The RCT involves randomly varying the reporting obligations and incentives for these NGOs. The results of the RCT and related analysis on a rich panel dataset on these NGOs, their communities and local government offices will help shed light on how monitoring and incentives can be improved in the NGO sector; how the staff of a complex organization (PPAF and its partners, who disburse the funds and support the local NGOs) respond to and manage new information; and on the relationship between publicly-funded NGO sector and traditional state institutions. One fourth of endline survey data collection was completed before the lockdown in March 2020. The remaining data collection is planned to be completed by December 2021. (AEA RCT Registry, the policy briefs and conference proceedings are available here:;;;–LxAhWR4YUKHepTDs4QFnoECAUQAA&;