To counter restrictions on NGO activity, local groups need to reduce their dependence on international financial support.

Many resource-strapped developing country governments seek international aid, but when that assistance is channeled through domestic civil society, it can threaten their political control. As a result, in the last two decades, 39 of the world’s 153 low- and middle-income countries have adopted laws restricting the inflow of foreign aid to domestically operating nongovernmental organizations (NGOs). Governments recognize that such laws harm their international reputations for supporting democracy and may invite donor punishment in terms of aid reductions. Yet, they perceive (...) foreign aid to NGOs as supporting political opponents and threatening their grip on power. In the aftermath of competitive electoral victories, governments often take new legal steps to limit these groups’ funding. We test this argument on an original dataset of laws detailing the regulation of foreign aid inflows to domestically operating NGOs in 153 low- and middle-income countries for the period 1993–2012. Using an event history approach, we find that foreign aid flows are associated with an increased risk of restrictive law adoption; a log unit increase in foreign aid raises the probability of adoption by 6.7%. This risk is exacerbated after the holding of competitive elections: the interaction of foreign aid and competitive elections increases the probability of adoption by 11%. (shrink)

How do public regulations shape the composition and behavior of non-governmental organizations (NGOs)? Because many NGOs advocate liberal causes, such as human rights, democracy, and gender equality, they upset the political status quo. At the same time, many NGOs operating in the Global South rely on international funding. This sometimes disconnects from local publics and leads to the proliferation of sham or ‘briefcase’ NGOs. Seeking to rein in the politically inconvenient NGO sector, governments exploit the role of international funding and (...) make the case for restricting the influence of NGOs that serve as foreign agents. To pursue this objective, states worldwide are enacting laws to restrict NGOs’ access to foreign funding. We examine this regulatory offensive through an Ethiopian case study, where recent legislation prohibits foreign-funded NGOs from working on politically sensitive issues. We find that most briefcase NGOs and local human rights groups in Ethiopia have disappeared, while survivors have either ‘rebranded’ or switched their work from proscribed areas. This research note highlights how governments can and do shape the population ecology of the non-governmental sector. Because NGOs seek legitimacy via their claims of grassroots support, a reliance on external funding makes them politically vulnerable. Any study of the NGO sector must include governments as the key component of NGOs’ institutional environment. (shrink)