The Rise of NGO Activism
CER-ETH – Center of Economic Research at ETH Zurich, Working paper No. 16/244
59 Pages Posted: 18 Apr 2016
There are 3 versions of this paper
The Rise of NGO Activism
The Rise of NGO Activism
The Rise of NGO Activism
Date Written: April 15, 2016
Abstract
Activist NGOs increasingly oppose industrial projects that have nevertheless been approved by public regulators. To understand this recent rise in NGO activism, we develop a theory of optimal regulation in which a regulated industry seeks to undertake a project that may be harmful to society. On the one hand, public regulation is vulnerable to the influence of the industry, and may approve the project even though it is harmful. On the other hand, an NGO may oppose the project. We characterize the circumstances under which NGO opposition occurs and the circumstances under which this opposition is socially beneficial. The theory is used to explain the role that NGOs have assumed in the last decades, and has implications for the legal status of NGO activism and the appropriate degree of transparency.
JEL Classification: D02, D74, D82
Suggested Citation: Suggested Citation