The Impact of Public Funding on the Different Types of Private Contributions
17 Pages Posted: 20 May 2020
Date Written: February 2020
We analyze the effect of public funding on private contributions to 67 nongovernmental development organizations (NGDOs) in Spain from 2006 to 2011. Previous literature gives theoretical explanations for both the crowding‐in and the crowding‐out effects, while the empirical evidence presents different realities. In this study, we find a partial crowding‐out effect (€1.00 of public funding reduces private contributions by €0.43) by using generalized method of moments estimators. However, this overall effect does not hold when analyzing the influence that different sources of public funds have on each type of private contribution.
Keywords: crowding‐in, crowding‐out, nonprofit organizations, private contributions, public funding
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