"The NGO Scramble: Organizational Insecurity and the Political Economy of Transnational Action" by Alexander Cooley and James Ron, International Security (Summer 2002), 5 Cambridge Center, 4th Fl., Cambridge, Mass. 02142–1493.

Everyone’s cheering the rise of international nongovernmental organizations (NGOs). These groups, ranging from familiar brand names such as CARE-USA to the newer Doctors without Borders, can fight poverty, government corruption, and other global ills, say enthusiasts. Ultimately, power will shift from dysfunctional states to liberal private organizations. It’s the dawn of a new global civil society!

Alas, there can be too much of a good thing, caution Cooley, a Columbia University political scientist, and Ron, a McGill University sociologist. As the number of international NGOs rises—it went from 1,000 to 5,500 between 1960 and 1996— competition for donor dollars drives them to act much like for-profits. They may aim to improve the world, but the focus on increasing market share, landing big contracts, and remaining solvent often leads to perverse results.

"Low barriers to entry," traditionally a virtue, may start the inefficiency ball rolling. In 1980, a total of 37 foreign relief agencies operated within one Cambodian refugee camp; in 1995, by contrast, 200 agencies flooded the refugee camps in Goma, the vortex of Hutu-Tutsi devastation in Rwanda. As a Guardian journalist put it, since aid had become "big, big money," any NGO "worth its salt recognized that it had to be in Rwanda."

Competition can lead to the squandering of aid: Money better spent abroad instead goes to grant-writers hoping for the same

U.S. Agency for International Development (or United Nations, or World Bank) contracts. Duplicated efforts, endless rounds of meetings, and a growing tail-toteeth ratio are other results. Worst of all, while competition may eliminate the inefficient, it can also eliminate some of the worthiest aid groups.

It’s having to compete every six or 12 months to win a new contract that causes the worst problems, Cooley and Ron believe. The need to keep the money coming can encourage NGOs to hurt the very people they’re supposed to help. In Kyrgyzstan, for example, NGOs brought in to help liberalize the economy encountered constant backsliding by local politicians. But because "donors often ask recipients whether the contractor’s project should be renewed," the NGOs were reluctant to tattle. In Goma, "the refugee camps became de facto safe havens for Hutu fighters." In the past, the aid givers likely would have put their foot down, but when one NGO contemplated a boycott of the camps in protest of the fighters’ presence, another aid group quickly signaled its willingness to take over the contract.

"More is not always better and competition does not solely reduce waste," Cooley and Ron warn. Market forces can homogenize groups and inhibit cooperation. The two scholars recommend that Western governments and other international-aid givers grant longer-term or nonrevocable contracts to NGOs. The groups themselves should search out funding from church groups and other alternative sources.