Do Development INGOs Really Work? The Impact of International Development NGOs on Human Capital and Economic Growth

Abstract

We argue that the presence of development INGOs has both a direct and an indirect effect on economic growth. Directly, development INGOs help economic growth through providing access to capital, supporting entrepreneurship, and facilitating economic stability. Indirectly, development INGOs impact economic growth through increasing human capital. Following recent research, we develop a simultaneous equation statistical model to assess the direct and indirect effect of development INGOs on growth cross-nationally.  We find much support for both the direct and indirect effects of development INGOs on economic growth.  These findings have positive implications for the ability of these organizations to improve economic well-being in lesser developed countries.