NGO Research Program: A Collective Action Perspective

Author(s): Erica Johnson and Aseem Prakash

Source: Policy Sciences , Sep., 2007, Vol. 40, No. 3 (Sep., 2007), pp. 221-240
Published by: Springer

Stable URL: https://www.jstor.org/stable/25474334

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Policy Sci (2007) 40:221-240
DOI 10.1007/sll077-007-9043-x

NGO research program: a collective action perspective

Erica Johnson * Aseem Prakash

Published online: 6 September 2007

? Springer Science+Business Media LLC 2007

Abstract This paper outlines a collective action approach to study nongovernmental

organizations (NGOs). We contend that while political scientists and sociologists have
extensively written about NGOs, they have not systematically examined fundamental
collective action issues such as why and where NGOs emerge, how they function, how they
are structured, and what strategies they employ to mitigate agency conflicts and ensure
accountability. Instead of theorizing about NGOs as a category, NGO scholars have
developed descriptive typologies relevant to study small subsets of the NGO population. In
contrast, the non-profit literature, which studies broadly the same actor category, has
systematically focused on fundamental questions inherent in any collective endeavor. We
conclude that by employing a collective action perspective, specifically the theories of
firm, NGO scholars will be able to develop explanations about NGO origin, structure, and
strategy that have superior explanatory power and are generalizable across NGOs.

Keywords NGOs Collective action

Scholars and the popular press emphasize the unique role of nongovernmental organiza
tions (NGOs) in sustaining democratic governance. International organizations such as the
World Bank and the United Nations routinely declare civil society to be critical for good
governance and economic development. Scholars even claim that the proliferation of
NGOs is leading to the emergence of a "world society" (Meyer et al. 1997), and that we
are entering an era of "politics beyond the state" (Wapner 1995). Yet, NGO scholars have

E. Johnson A. Prakash (El)

Department of Political Science, University of Washington, 39 Gowen Hall, Box 353530, Seattle,
WA 98195-3530, USA
e-mail: [email protected]
URL: http://www.faculty.washington.edu/aseem/
E. Johnson
e-mail: [email protected]

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 222 Policy Sci (2007) 40:221-240

not systematically scrutinized the conditions under which individuals collectively seek to
pursue their political, economic, and social goals via NGOs rather than unilaterally or via
some other collective actor.
NGO scholars in political science and sociology have documented hundreds of cases
where NGOs have successfully influenced public and business policies. This rich empirical
material, however, is not helpful in examining NGOs as a category or in comparing the
relative efficacy of NGOs in relation to governments or firms working toward similar
goals. The problem, we believe, is that the NGO literature tends not to employ general
izable theories to study NGOs. Instead, it relies on descriptive typologies that are
developed to study small subsets of the NGO population. Furthermore, by neglecting
collective action issues inherent in any collective endeavor, this literature does not sys
tematically examine core questions regarding NGOs' emergence (why, where, and when),
internal governance (agency and accountability), and organizational strategies (targeting
and mobilization).
While the vocabularies and typologies that NGO scholars employ differ, they all study
the same actor category. NGOs are different from (1) governments because they cannot
require (via the threat of legitimate coercion) that entities living in a particular territory
follow their laws and rules (hence, non-governmental), and (2) firms because they do not
distribute profits to their residual claimants (hence, non-profits). To systematically study
NGOs as a category, one ought to identify collective action issues pertaining to NGO
emergence, structure, strategy, and efficacy that result directly from these common attri
butes. Drawing on the research of non-profit scholars most prominently found in policy and
management studies, we present the collective action approach, specifically the theories of
firm, as an organizing framework in this regard. While recognizing that NGOs function
within the non-distribution constraint, we contend that NGOs have several important
conceptual similarities with firms, another category of non-governmental actors. Individ
uals, as principals, work collectively via NGOs to pursue shared objectives in similar ways
that shareholders use firms to collectively pursue a common goal. Instead of lobbying alone
to protect the environment, individuals might create or join an environmental NGO. Or,
instead of agitating by themselves against sweatshops, individuals might join or support an
NGO that works on this issue. Thus, the study of the firm can be instructive because
individuals make analytically similar choices regarding the collective organization of their
economic, social, or political activities.
The skeptical reader might suggest that we are advocating the study of apples based on a
study of oranges: firms and NGOs are so distinct that little can be gained by viewing them
through a common theoretical framework. Indeed, Keck and Sikkink, the leading NGO
scholars, assert that NGOs, or participants in transnational advocacy networks, are not like
firms because of "the centrality of principled beliefs or values in motivating their for
mations" (1998, p. 1). However, Sell and Prakash (2004) point out that this distinction is
not persuasive because instrumental concerns also shape NGO emergence, objectives, and
strategies. Although NGOs do pursue instrumental objectives, NGO scholars might counter
that these objectives translate into policies that create predominantly non-excludable
benefits. Firms, in contrast, pursue policies that benefit their shareholders only. While
NGOs do not distribute profits to their principals, they do serve well-defined constituencies
and create excludable benefits for them. As Sell and Prakash (2004) point out, labor
unions?identified as NGOs by Keck and Sikkink, agitate for excludable benefits for their
members by opposing imports, outsourcing, and/or the use of non-union labor. Even NGOs
that do not explicitly pursue material goals have well-defined constituencies that reap
excludable benefits. The National Association for the Advancement of Colored People, the

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Policy Sci (2007) 40:221-240 223

American Association for Retired People, and the National Rifle Association are useful
examples. This discussion demonstrates the significant analytical similarities between
firms and NGOs, and the insights generated in the study of the firm can usefully structure
the NGO research program.
The collective action perspective has three core features: (1) a view of institutions as
bundles of contracts between (2) principals and agents whose interactions are governed by
(3) hierarchical control rather than decentralized exchanges between anonymous agents
(Moe 1984). Like firms, NGOs exhibit these core characteristics. Because firms and NGOs
are two key institutional mechanisms through which individuals participate in collective
non-governmental endeavors, the decision to work alone or outsource to other organiza
tions (the "make or buy" decision) that individuals face in the two contexts are likely to be
analytically analogous. Accordingly, similar sets of factors are likely to influence the
institutional designs of firms and NGOs.1
This exchange is likely to create payoffs for collective action scholars because their
theories, which were developed in different contexts, will now be applied to (and conse
quently sharpened by) the study of a new category of actors. Moreover, as issues of
corporate social responsibility increasingly shape firms' strategies,2 the research on NGO
strategy?especially how to deploy resources when outcomes are difficult to measure?
might offer interesting insights for business strategy scholars.
Given this happy situation of mutual gains, our paper employs the collective action
perspective to develop clearer theoretical understanding of four core questions: what NGOs
are, how they emerge, how they function, and how they influence local and global politics.
To accomplish this task, we critique two dominant strains of the NGO literature: the
political science approaches to NGO politics and the social movement literature in
sociology. We contrast these literatures with the multi-disciplinary nonprofit literature,
which, although studying broadly the same actor, has systematically examined collective
action issues in ways that are similar to the theories of the firm.4 We find that the non-profit
literature most effectively conceptualizes NGOs as collective endeavors and most coher
ently investigates core questions about how they emerge, function, and affect outcomes.

1 In this context, the "economics of religion" literature, which conceptualizes the religion sector as a
market characterized by producers (religious organizations) and consumers (religious adherents), is
instructive. Scholars have applied the theories of firm to understand why denominations vary in their
organizational forms, outreach strategies, and the supply of religious goods. For an overview, see Iannac
cone (1998).
2 By this we refer to beyond-compliance policies adopted by firms with the explicit objective of creating
positive social externalities (Prakash and Potoski 2006).
3 We do not subsume the social capital literature (Putnam 1993) under NGO politics literature because we
are less interested in how social capital is created and deployed, and more interested in engaging with
scholars who study how non-governmental actors directly influence public policy and provide collective
goods and services.
4 We recognize that some political scientists have produced exceptional work on governance and collective
action that has the potential to be labeled as non-profit scholarship. Professor Ostrom (1990) is an obvious
example, as her work focuses on governance of common-pool resources by non-market and non-state
mechanisms. While some self-governance institutions studied by Professor Ostrom have characteristics of
non-profits?they operate under the non-distributional constraint?some do not. For example, a farmers'
cooperative established to manage a common pool resource might distribute all of its profits to its member.
While it is a self-governing institution, it is not a non-profit because it violates the non-distributional
constraint. In sum, while various governance literatures in political science might overlap with the non-profit
literature, the former cannot be subsumed under the latter.

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 224 Policy Sci (2007) 40:221-240

What are NGOs?

Although most scholars implicitly agree that NGOs are institutions through which indi
viduals come together to pursue shared goals, they disagree on how to classify these actors
and their actions (Lewis and Wallace 2000; Vakil 1997) and on how to identify core
questions to systematically study them. Political science, sociology, and non-profit
explanations each work with their own units of analysis. Political scientists, specifically
international relations and comparative politics scholars, tend to define NGOs by what they
are not?non-governmental?and by their advocacy roles. They study how NGOs influ
ence public policy and, to some extent, business policy (Wapner 1995; Keck and Sikkink
1998; Florini 2000; Baron 2003; Sasser et al. 2006), or how these actors contribute to an
emergence of global civil society where politics take place beyond the state (Wapner
1995). In addition to their non-governmental status, scholars such as Keck and Sikkink
(1998) emphasize the non-profit character of NGOs, insisting that, unlike firms, which
pursue instrumental goals, NGOs (or transnational advocacy networks, the subcategory
they study) pursue normative goals.
While acknowledging a role for individual social movement organization (akin to
NGOs), sociologists are most concerned with the broad groupings of organizations that
comprise social movements (McAdam 1996). They emphasize social movements' advo
cacy roles and how they create or leverage political opportunity structures (POS) to
influence public policy. They study how power asymmetries and a lack of institutional
access force the underdogs to organize collectively outside the formal political realm. The
normative underpinnings of the social movement research program are clearly defined, but
the analytical boundaries of a social movement are not as clear. Indeed, social movements
are defined by their main processes of: (1) mounting collective challenges; (2) drawing on
social networks, common purposes, and cultural frameworks; and (3) building solidarity
through connective structures and collective identities to sustain collective action (Tarrow
1998a, p. 4).5 Such encompassing descriptions are not helpful to differentiate a social
movement from a non-movement. The analytical merit of the social movement concept is
undermined, however, because almost any kind of social action, including collective action
through the agencies of firms and governments, can be subsumed under the banner of a
social movement.
For social movement scholars such as Tarrow (1998a, b, 2001) and McAdam et al.
(2001), the critical element of social movements (unlike NGOs which might engage in
routine politics) is "contentious politics," which "often is the only recourse that ordinary
people possess against better-equipped opponents or powerful states" (Tarrow 1998a, p. 3).
For them, contentious forms of collective action "are different than market relations,
lobbying, or representative politics because they bring ordinary people into confrontation
with opponents, elites, or authorities" (Tarrow 1998a, p. 4). Nevertheless, as market and
political mechanisms are always present in a social movement's origins, functions, and
efficacy, these distinctions create a false dichotomy. With loose definitions on the one hand
and false dichotomy on the other, the unique contributions of the social movement research
program are difficult to identify. Whereas political scientists differentiate far too much
between types of NGOs and do not sufficiently acknowledge that NGOs share many
similarities with one another and with other forms of collective action, sociologists adopt

5 Social movement literature is popular in political science as well. Incidentally, Professor Tarrow is a
Professor of Political Science (Government) and Sociology at Cornell University.

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Policy Sci (2007) 40:221-240 225

an overly expansive and elastic definition of social movements and the individual com
ponent organizations.
In contrast to the political science and sociology approaches, the multi-disciplinary non
profit literature focuses on how NGOs (or non-profit organizations, NPOs, as they gen
erally term them) evolve and structure their operations. Instead of focusing on the demand
for policy advocacy, non-profit scholars tend to investigate the role these actors play in the
supply of private and collective goods and services. Insisting that the core feature of non
profits is the non-distributional constraint (profits might be earned but cannot be distributed
to principals), non-profit scholars have gone beyond the public-private dichotomy in which
governments supply public goods and profit-seeking firms supply private goods.
Importantly, this literature does not view non-profits as institution replacing; rather,
non-profits are choice enhancing because they increase the heterogeneity of suppliers. To
their credit, non-profit scholars recognize that all institutions (including markets and firms)
have strengths and weaknesses. Instead of looking only at successful cases as NGO politics
scholars often do, non-profit scholars study the conditions under which non-profits (in
relation to firms and government agencies) may or may not become the preferred mode of
service delivery. Drawing from theories of the firm, non-profit scholars also recognize that
market imperatives lead to institutional mimicry and the diffusion of best practices among
non-profits, and from governments and firms to non-profits. Consequently, non-profits
might resemble firms in their organizational practices and structures?and several scholars
are concerned about the broader implications of this trend (Smith and Lipsky 1995). In
sum, unlike NGO politics scholars who emphasize contentious advocacy against the state
or firms, non-profit scholars explore cooperation and complementarities between firms,
governments, and NGOs (see, for example, Ebrahim 2005).6 They recognize that a variety
of institutional forms might operate in the same industry or issue area. We find that among
the three literatures examining non-governmental actors operating under the non-distri
butional constraint, the non-profit literature is most sophisticated in working with a
generalizable theoretical framework to address what NGOs are, and then identifying core
collective action issues to systematically examine how these issues bear upon institutional
emergence, structure, strategy, and efficacy.
We find that NGO scholars are prone to develop descriptive typologies (descriptive
theories at best) that are applicable to only small subsets of NGOs and social movements.
Given this array of vocabularies and the emphasis on different issues, it is not surprising
that the NGO research program lacks core theoretical questions to organize a systematic
cross-disciplinary inquiry.7 This lack of coherence and the insistence within political
science and sociology that NGOs are somehow different from other collective endeavors,
have discouraged these scholars from comparing and contrasting NGOs with other forms
of collective action. In these two disciplines, the analytical uniqueness of NGOs is over
emphasized and the analytical similarities between NGOs and firms are glossed over, if not

Political scientists and sociologists have tended to view NGOs primarily as physical organizations, not as
rule structures. Consequently, they tend not to focus on the institutional dimensions of these actors. In
contrast, the non-profit literature implicitly recognized that prior to examining non-profits as organizations,
scholars must figure out these organizations' institutional foundations. Non-profit scholars therefore have
paid considerable attention to collective action issues germane for this institutional category.
While we respect the heterodoxy of views on generalizable theories, we do not think that this "area studies
approach" is an analytically useful way to study NGOs. Lessons from one "area" are seldom useful for the
study of other areas because every area is supposed to be analytically unique and therefore needs a different
theory. As a result, NGO scholars tend to overlook opportunities to cumulate knowledge about NGOs as a
category of collective actors and employ insights from other types of collective action to study NGOs.

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 226 Policy Sci (2007) 40:221-240

entirely denied (as in Keck and Sikkink 1998). The collective action perspective especially
the theories of firm, could offer valuable insights for the study of NGOs.8

Institutional emergence

Collective action is the study of the conditions under which individuals might cooperate to
pursue common goals. Individuals pursue collective action because they believe that
pooling resources and coordinating strategies with like-minded actors can achieve certain
goals more efficiently. Because cooperation may not always be voluntary, power and
coercion influence the demand and supply of collective action (Knight 1992; Moe 2005).
Most collective action scholars, however, focus on voluntary collective action whereby
actors are motivated to seek benefits that are unlikely to be captured via unilateral action.
Organizing collective action is not as easy as basic constructs such as the prisoner's
dilemma would suggest. Since Olson's (1965) seminal work, it is well recognized that free
riding, among other things, impedes the supply of collective action. Actors want to reap the
benefit of collective action without bearing the costs. Theories of the firm provide perhaps
the clearest exposition of the challenges in organizing collective action. As an institutional
response to market failures, the firm replaces decentralized, anonymous market exchanges
with structured, hierarchical exchanges. The firm is an interesting case for the study of
institutional emergence and evolution because it exemplifies conscious and voluntary
decisions by actors regarding the rule structures to collectively organize economic activity.
Moreover, theories of the firm have provided valuable insights to understand principal
agency issues (Berle and Means 1932) and the institutional arrangements that might
mitigate them. As we discuss later, a similar logic could be extended to predict the
organizational structures of NGOs.
While Coase (1937) introduced the notion of transaction cost, Williamson (1975, 1986)
provided a better specification regarding why firms (as hierarchies) arise.9 He linked the
emergence of transaction costs in decentralized exchanges to asset specificity, bounded
rationality, and opportunism. He hypothesizes that the "make or buy" decision?a firm's
dilemma about whether to make its own inputs or to outsource the production to another
firm?is contingent on the levels of specificity entailed in a transaction: the higher the asset
specificity, the higher is the likelihood that the transaction would be undertaken within the
firm's internal hierarchy. Williamson's logic provides a falsifiable hypothesis to predict the
boundary of any firm and why the make-buy decisions vary across firms and industries.
Scholars have used this logic to study the membership in business alliances and networks
(Dyer 1996) and it can be extended to the study of NGO emergence and the boundaries of
NGO networks across issue areas.
Influenced by the collective action perspective, including the theories of the firm, non
profit scholarship is a useful starting point. Unlike NGO scholars, non-profit scholars
identify conditions under which NGOs arise and why different numbers and sizes populate

8 Indeed, Salamon and Anheier (1998a, b) made a similar appeal for developing and testing a generalizable
theory of non-profit organizations that would link nonprofit studies to "bodies of thought of central concern
to social science more generally" (1998a, p. 281).
9 Chandler (1977) identifies two phases in the development of the American business organization: the pre
1850 phase of the market economy and the post-1850 phase of managerial capitalism. Chandler masterfully
documents how the "visible hand" of the modern firm economized on administrative costs in relation to
economic exchanges via the "invisible hand." For him, the railroads were the first modern industrial
enterprise embodying managerial capitalism.

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Policy Sci (2007) 40:221-240 227

different industries/sectors. Early non-profit scholarship suggested that nonprofits arise due
to market or government failure (Weisbrod 1991). In market exchanges, information
asymmetries between the buyer and the seller lead to uncertainty, distrust, and market
failure. Historically, governments were viewed as the trustworthy actors to correct market
failures (Pigou 1960[1920]). Hansmann (1987) and Weisbrod (1991) added non-profits to
this list of trustworthy institutions. They suggest that consumers trust these institutions
because the non-profit entrepreneur is prohibited from distributing profits to the principals
who exercise control over the organization?the assumption being that the pursuit of
profits leads to exploitative behavior. Hansmann also argues that trust in and the reputation
of the seller may mitigate problems with information asymmetries.10
With two trustworthy suppliers?governments and non-profits?one might wonder if it
is possible to predict ex ante which institutional form will dominate. Anticipating this
issue, Weisbrod (1991) introduced heterogeneity in demand into the equation. Political and
administrative constraints often prevent governments from supplying the full range of
goods that their citizens prefer. If most consumers want goods with the same attributes
(homogeneous demand), governments will be most efficient at supplying the good because
they can tap into economies of scale. With preference heterogeneity, citizens might try to
pressure governments via exit, voice, or loyalty (Hirschman 1970). In addition, citizens
might look for other vendors. Because information asymmetries discourage recourse to the
private supply, citizens may decide to establish or join non-profits. This is the simple story
of the emergence of non-profits. In effect, non-profits emerge to fill service or advocacy
gaps that the public and private sectors miss.
In the nonprofit literature, the non-distributional constraint is the foundation for non
profit emergence and trustworthiness. But the non-distributional constraint can be cir
cumvented: non-profit managers may skim off the residual through high salaries, hefty
perquisites, luxury travel, and conferences in exotic locales. This should not come as a
surprise because agency conflicts are pervasive in any collective endeavor: from shocking
accounting irregularities in Enron and WorldCom to widespread molestation in the
Catholic Church, mafia presence in major unions, and corruption in prominent charity
organizations.11 Conceptually, it is difficult to assert that managerial abuses (agency
conflicts) will be less muted in non-profits versus for-profit corporations.12 One plausible
argument might be that the cadre of people joining NGOs is intrinsically more "moral" (or
less materially oriented) than the ones working for firms (Handy and Katz 1998). We
believe that this can be an interesting area of future research.

10 Moreover, other non-profit scholars point to an inverse relationship between trust in the government and
non-profit formation and participation. In this view, higher numbers of non-profits emerge when trust in
government is low (Brooks and Lewis 2001) or when dissatisfaction with the quality or quantity of public or
private services is high (Douglas 1987).
11 The U.S. regulatory environment has anticipated this problem. To discourage "excessive" executive
compensation in non-profits, the 1996 Federal Taxpayer Bill grants the IRS the authority to impose penalties
in this regard (Barragato 2002).
12 Research on executive compensation in non-profits is seeking to explore this issue. Frumkin and Keating
(2004) find that executive compensation is higher in non-profits with free cash flows and with stronger
financial performance. This violates the non-distributional constraint and therefore is indicative of agency
problems.

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 228 Policy Sci (2007) 40:221-240

How do NGOs function?

To understand how NGOs function, this section examines how they acquire resources, how
they structure their internal organization and pursue specific strategies, and how they
enforce accountability. While NGO scholars have developed a sophisticated understanding
of NGO advocacy strategies, their models and typologies shed less light regarding orga
nizational structures, resource acquisition, and agency problems?issues that non-profit
scholarship and theories of the firm address more explicitly.

Organizational strategies

Explanations for organizational strategies are among the most advanced topics in the NGO
scholarship. Among political scientists, Keck and Sikkink's (1998) model of transnational
advocacy networks (TANs) develops an understanding of the "boomerang effect" to
identify how domestic groups draw on international linkages to mobilize external pressure
for changing a state's domestic policies. Emphasizing the strategy to seek international
assistance, Keck and Sikkink do not address how different TANs are created and struc
tured, how resources affect the ability to sustain their various efforts, or what principal
agent problems arise when foreign assistance is introduced into domestic politics. They
also leave unexplored the extent to which domestic groups modify their agendas to fit with
the agenda of international NGOs and how this change affects the ability to mobilize
domestic constituencies. As research on the "resource curse" (Ross 2001) and foreign aid
(Remmer 2004) suggests, governments that do not rely on citizens for taxes, become less
responsive to them. Would this argument hold for TANs that rely on external support from
foundations, international financial institutions, bilateral aid, and so on?
Similarly, the social movement literature examines how social movement organizations
make strategic use of political opportunity structures (POS)?the degree to which groups
are likely to gain access to power and to manipulate the political system, to accomplish
their goals (McAdam et al. 1996). Political opportunities are measured in terms of: (1) the
relative openness of the institutionalized political system, (2) the stability of elite align
ments, (3) the presence of elite allies, and (4) the state's capacity and propensity for
repression (McAdam 1996, p. 27). The POS concept is used loosely to identify the con
ditions that facilitate the emergence of social movements and the strategies they use in
different contexts. In addition, the POS approach (as opposed to the resource mobilization
perspective in the social movement literature) offers little explanation for social movement
resource mobilization and agency problems.
While some social movement scholars recognize that successful NGOs "adopt strate
gies that promote their causes?whether this is through protest or conventional lobbying
activities" (Dalton et al. 2003, p. 744), most tend to focus on contentious politics as the
key organizational strategy. NGOs represent new issue demands and political values that
are in conflict with the status quo (Rohrschneider and Dalton 2002; Dalton et al. 2003).
The desire to influence policy means that NGOs must choose between the tactics of
protesting the political status quo or working within conventional channels to implement
new policies. By and large, political science and social movement research expects NGOs
to be loosely structured and to engage in "alternative" action repertoires, especially protest
activities (Lipsky 1968; McAdam 1997). It is argued that unconventional action draws
attention to NGOs' causes that would not occur through normal political processes. Again,

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Policy Sci (2007) 40:221-240 229

there is seldom a discussion about resources, organizational structures, or agency prob

lems?issues that the non-profit scholarship addresses directly.

Organizational structures

Chandler's (1962) foundational work on business firms showed that organizational struc
tures follow organizational strategies. Analogously, NGOs can be expected to carefully
strategize about the issues they want to agitate for, tactics they wish to employ, and the
organizational structures to achieve these goals. If they cannot effectively pursue a policy
goal alone, they might create or join networks or alliances and pool resources with like
minded NGOs. Even working in networks with like-minded actors, however, NGO
activists are unlikely to be oblivious to the imperatives of organizational survival. As in the
case of firms, cooperation and competition will go hand in hand. NGOs will seek to protect
their interests, especially to take credit if their efforts succeed; after all, publicity is the
oxygen for organizational survival. Furthermore, if membership in a network compels
them to invest resources that are not fungible (say, resources that cannot be transferred
from one advocacy campaign to another), they might be wary of committing such
resources lest a competing NGO assume a leadership position and corner the fame and
publicity. It follows that, for NGO networks to function smoothly and not be consumed by
internal bickering, rules are required to match investments and benefits for each network
member. As these suggestions imply, employing insights from the theories of firms gen
erates falsifiable hypotheses that carefully investigate NGOs' strategies.
Unlike their political science counterparts, social movement theorists have paid con
siderable attention to "organizational infrastructures," the forms that organizations take
(McCarthy 1995). Mobilizing structures are viewed as the formal and informal forms of
organization available to social movement activists. In the most general sense, these are
"agreed upon ways of engaging in collective action which include particular 'tactical
repertoires,' particular 'social movement organizational' forms, and 'modular social
movement repertoires'" (McCarthy 1995, p. 141). While McCarthy sets out a 2 x 2
classification of organizational forms as informal vs. formal and movement vs. non
movement organizational structures, the two dimensions do not adequately explain the
political strategies and orientations that cohere with this wide variety of organizational
structures. Indeed, McCarthy's classification system dismisses the political and movement
orientations of a surprising range of organizations. For example, neighborhood-watch
groups can be considered a recent type of social movement arising out of state and market
failure. Likewise, the ability of churches or other religious structures to mobilize voters
seems evident in communities around the globe. While descriptive classifications of NGO
structures are useful, they are less helpful in systematically examining the link between
structure and strategy and, eventually, between strategy and outcome.
In sum, while the boomerang effect and political opportunity structure concepts offer
important starting points for exploring NGO strategies and structures, NGO scholars tend
to assume that people will come together and somehow manage to coordinate and sustain
collective action without implicit or explicit structures or organizational rules. By ignoring
how individuals organize NGOs, these literatures fail to explain where these structures
come from, how they influence resource acquisition and agency issues, and how they
eventually impact organizational outcomes or efficacy.
By contrast, non-profit scholars consciously seek to identify factors such as the regu
latory environment and the range of products supplied that might influence non-profits'

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 230 Policy Sci (2007) 40:221-240

organizational structure (see, for example, Hansmann 1987). As non-profits have become
more prominent social actors, their organizational structures and staffs have likewise
become more professionalized. Rather than a loose set of procedures draped around elite
networks (Hall 1982), these scholars suggest that non-profits resemble formal bureaucra
cies or "multi-product firms" geared toward producing goods that are sometimes external
to their formal missions (DiMaggio and Anheier 1990; Young 1998; Goddeeris and
Weisbrod 1998).
Unlike service-delivery non-profits where the market and regulatory environment sig
nificantly influence organizational strategy and structure, we suspect that in advocacy
based NGOs, the relative power of the principals and the patrons (assuming they do not
completely overlap) will critically influence organizational structure and strategy. While
principals (members) influence non-profits through voice (the exercise of their voting
power) and exit, patrons (donors) often provide crucial revenues and organizational
structures and strategies (Ben-Ner 1986) to sustain the non-profit. Focusing on coalition
formation among patrons, Ben-Ner expects high-demand patrons to dominate the non
profit organization and to set prices and output parameters that maximize their own wel
fare, and even to exploit other patrons to the extent permitted by competition. In contrast,
Hansmann (1987) offers a model to illustrate the way in which principals (members)
influence the structure (the size, fees, and membership characteristics) of individual
organizations. Assuming limited economies of scale (in terms of membership size) in the
operation of non-profits, and assuming that a given organization must charge all of its
members the same fee, free formation of non-profits in this model results in a system of
member-controlled organizations that are usually smaller than the size that minimizes
average cost per member. Thus organizational strategy, structure, and size are limited by
donative memberships. Hansmann's model of the structure of non-profits has obvious
parallels with Olson's logic of collective action: relatively small groups form viable
organizations for providing collective goods because mitigation of free riding via moni
toring is easier in small groups.
The following discussion further elaborates on the parallels between firm and NGO
strategies and structures. In any issue area (or industry), one can find several NGOs
advocating similar policies. Why should Citizen A support NGO X over NGO Y? And
knowing that members have a choice, how would NGOs respond to make themselves more
attractive to potential members? Let us examine how firms respond to such situations. In
industries with undifferentiated products (such as generic pharmaceuticals or gasoline
distribution), firms expect consumers to prioritize price over other product attributes; hence
they seek to be cost leaders. If a firm does not want to play the price game, it seeks to
differentiate its product, often via advertising and marketing to artificially set apart its
products. In doing so, the firm hopes that consumers will not benchmark its products
against lower priced competitors.
We expect NGOs to behave similarly. While the price game (membership fees) may
make less sense in the NGO context, the differentiation game is important. NGOs are likely
to differentiate themselves either via their "products" or via the strategies employed to
supply these products. For example, Rainforest Network supplies a differentiated product,
advocacy for rainforests (not the generic product of environmental protection), while
Trouts Unlimited supplies another differentiated product, advocacy to protect trouts. By
doing so, these NGOs segment the market for environmental protection and seek to cap
italize on their market niche. If citizen A cares about environmental protection in general
but trouts in particular, s/he may want to send his/her dollars to Trouts Unlimited, rather
than to Rainforest Network. Thus, competition for membership dollars leads NGOs as

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Policy Sci (2007) 40:221-240 231

strategic and instrumental actors to exploit preference heterogeneities among potential

members and donors.
Some firms differentiate themselves not so much by the product they offer but by the
processes employed to supply it. Dolphin-safe tuna may taste no different from other tuna
in a "blind taste test," yet consumers might pay a premium for the former because they
support the fishing process that firms have adopted. Analogously, NGOs might differen
tiate themselves not by the product they offer but by the processes through which they
supply it. Supplying the generic product of environmental protection, Greenpeace differ
entiates itself via its aggressive advocacy tactics while the Natural Resource Defense
Council's distinctiveness lies in legal advocacy skills. Thus, NGOs may differentiate
themselves on the bases of their "core competencies" (Hamel and Prahald 1990), which
determines the manner in which their outputs are supplied. Given these similar responses to
competition for market share, theories of the firm offer important lessons for understanding
NGO structures and strategies.

Resources

Organizations require scarce resources to survive. Salaries have to be paid, research must
be done, and placards and banners for protests or events supplied. NGO scholars, however,
have not paid much attention to how NGOs acquire material resources to sustain their
activities. Implicitly, they suggest that non-material, value-oriented motivations suffice to
sustain collective action. While early social movement scholars acknowledged that the
quantity and type of resources affect organizations' strategies and structures (Gamson
1975; McCarthy and Zald 1977), subsequent work dismissed the resource mobilization
theory in favor of issues of political opportunity structures, framing, and organizational
infrastructures (McAdam et al. 1996). In doing so, these scholars ignore how resource
mobilization moves NGOs away from their stated objectives and normative orientations.
Indeed, as the non-profit literature points out, resource mobilization might lead to agency
conflicts that make an NGO less responsive to the objectives of its members and/or
constituencies, the presumed principals, and more attentive to the requirements of the
donors (Ebrahim 2003a; Christensen and Ebrahim 2006).
Recent NGO scholarship has begun to acknowledge this important omission. This new
line of research examines how reconciling material pressures and normative motivations
produces outcomes at odds with the expectations of the NGO literature (Cooley and Ron
2002; Henderson 2002). The alleged value-orientations and "good" intentions of NGOs do
not necessarily lead either to desired policy outcomes or induce cooperation among NGOs
that have similar normative motivations (Clifford 2005). This situation, of course, raises a
host of new questions. If competition is an attribute of selfish actors seeking private gains,
cooperation should not be a problem among non-selfish, principled actors seeking to
supply public or private goods with widespread positive externalities. Why then do we see
presumably non-selfish, principled actors competing for material resources in ways similar
to profit-seeking firms competing for market share?
These revisionist NGO scholars go only half way in recognizing that NGOs can be
expected to compete like firms for resources. From the perspective of individual NGOs,
membership and foundation dollars acquire the characteristics of rival goods?if I have
them, you don't. While the salience is likely to vary across NGOs, external funders provide
a significant percentage of resources for NGO activities. The resource scarce environment
creates conditions for NGOs not merely to compete with one another but also to prioritize

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 232 Policy Sci (2007) 40:221-240

resource acquisition over their real objectives, including faithfully working toward prin
cipals' (members') goals.
Indeed, NGOs do look and behave like firms, facing similar constraints regarding
resource mobilization, organizational dynamics, and competition for market share.
Exploring the relationship between foreign aid and the development of civil society
organizations in post-Soviet Russia, Henderson (2002, p. 159) argues, "[g]roups...are not
necessarily willing to share their grant ideas for fear that it would jeopardize their own
funding possibilities." Furthermore, competition for funding can cause groups to decrease
in size, rather than grow, because "grants provide an incentive for members of the group to
leave, form their own organizations, and apply for grants so they can set up their own
separate relationships with funders without having to share the grant money with others in
the group" (Sperling 1998 cited in Henderson 2002, p. 160). Cooley and Ron (2002, p. 6)
also emphasize that the increasing marketization of NGO activities, as demonstrated by the
use of competitive tenders and renewable contracting, "generates incentives that produce
dysfunctional outcomes."
While this emerging literature makes important inroads, it blames the environment in
which NGOs function for inducing these "perverse" firm-like behaviors and do not rec
ognize that such behavior is inherent to any organization. Let us assume that the
competitive environment is indeed at fault. Imagine a perfect world in which a monopolist
NGO occupied every sector and donors did not invite multiple NGOs to compete for the
same pool of funds. If revisionists are correct, NGOs would not compete and would stick to
their principled objectives. It follows, therefore, and somewhat ironically, that the
democracy and pluralism championed by NGO advocates undermine the normative basis
of their existence.
The non-profit research agenda explicitly recognizes the important relationship between
material resources and organizational origins, structures and functions, and efficacy. They
find that because sources of funding are crucial determinants of emergence, orientations,
and effectiveness, non-profit organizations make calculated decisions about what types of
resources they pursue. For example, O'Regan and Oster (2002) find that government
contracts significantly alter the types of individuals recruited for and activities performed
by non-profit boards of directors.
The non-profit literature also recognizes that limited access to resources shapes orga
nizational strategies and generates critical issues of multiple principle-agent problems
(Ebrahim 2003a). Access to capital by non-profit organizations is limited to membership
subscriptions, donations, and retained earnings. The for-profit mechanism of raising funds
from investors is typically not available to non-profit organizations (Ben-Ner 2004).
Indeed, even fundraising activities that lead to prioritizing donors over members might
cause a non-profit "to divert activities from its mission" (Weisbrod 1998, p. 55). In order
to overcome these fundraising problems, non-profits in several sectors have begun to
experiment with commercial activities to supplement their access to resources. These
forays pit them against for-profits and often times lead them to mimic for-profits in terms
of organizational strategies and structures. Thus, the argument for the uniqueness of non
profits is eroded.

Agency conflicts and accountability

Agency conflicts are pervasive in collective endeavors (Berle and Means 1932). With
information asymmetries and non-trivial monitoring costs, agents have incentives to

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Policy Sci (2007) 40:221-240 233

substitute their preferences for the preferences of their principals. As managerial theories
of the firm suggest, managers seek power and prestige by increasing the departmental
headcount and budgets at the cost of the firm's profitability (Marris 1964).13 Anticipating
these problems, shareholders create institutions to mitigate agency conflict. Within the
firm, the board of directors is expected to serve as the shareholders' watchdog. Externally,
regulators acting on the shareholders' behalf create rules to constrain managerial abuses.
Further, executive compensation may be tied to profitability, and the market for mergers
and takeovers empowers shareholders vis-a-vis managers (Manne 1965).
Because agency conflict is a neglected issue in the NGO literature, scholars tend to
ignore how NGOs might (or ought to) establish internal institutions to mitigate them and
how this, in turn, influences organizational strategy and performance. In some ways, this
omission is emblematic of a normative bias in the NGO scholarship that had led to: (1) the
modeling of NGOs as non-instrumental actors seeking to serve public purposes and
implicitly assuming that individuals work for NGOs for non-instrumental reasons, and (2)
a focus only on successful cases of NGO advocacy to the neglect of failed endeavors (Price
2003)?failures in which agency conflicts may be a contributing cause.
Recent NGO, however, has made progress in addressing this problem (Henderson 2002;
Cooley and Ron 2002; Wapner 2002). Recent work on foreign aid to civil society orga
nizations in transitional and developing countries problematizes the issues of identifying
NGOs' principals. For example, the body of work on post-Soviet civil society development
finds that NGOs are often "ghettoized" and are more responsive to their foreign donors
than the communities and individuals they were created to serve (Henderson 2002;
Mendelson and Glenn 2002). Moreover in their cross-regional case studies, Cooley and
Ron (2002, p. 15) also argue that, contrary to expectations in this literature, "relations
between donors, contractors, and recipients can be modeled as a double set of 'principal
agent' problems." Likewise, non-profit research finds that non-profit actors claim multiple
levels of accountability and are more driven by upward accountability to managers, donors,
trustees, and boards of governors, rather than by downward accountability to those whose
interests the organizations claim to promote (Ebrahim 2003a; Christensen and Ebrahim
2006). In addition, the mechanisms for enforcing upward or external accountability to
donors lead NGOs and funders to focus on short-term accountability at the expense of
longer-term strategic processes which are necessary for long-term social and political
changes (Ebrahim 2003b).
NGOs claim legitimacy and differentiate themselves from instrumental actors such as
firms because of the assertion that they serve the public interest. Revisionists, nevertheless,
suggest that NGOs also pursue very parochial interests and have no clear internal demo
cratic characteristics to counter agency loss (Edwards and Hulme 1996). Compounding
these problems, NGOs mostly have appointed rather than elected leaders and those who are
elected are generally chosen by a small group of likeminded advisors or directors. While
NGOs claim to represent the public interest, their accountability does not arise from the
same democratic bases as some parties and governments (Grant and Keohane 2005, pp.
37-38).
Wapner (2002) also argues that organizational structures and goals complicate NGO
transparency and responsiveness to various stakeholders. Rather than being free to act on
their own, NGOs must advance the concerns of their various members, donors, and
advisors, and, while these individuals usually share similar ideological stances, they are
rarely homogenous. In addition, NGOs must cooperate, coordinate, and compromise with

13 Also, see Niskanen's (1971) budget maximizing model of public bureaucracies.

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 234 Policy Sci (2007) 40:221-240

other NGOs to advance their causes in networks; they must adjust their strategies, goals,
and relationships to appear attractive to states in order to influence policy or state behavior;
and, finally, to the extent that they work to influence international governmental organi
zations, NGOs must demonstrate deference toward international NGOs and associated
international regimes. Moreover, in several countries NGOs are subject to more stringent
reporting about their finances and activities because of their tax-exempt status. All these
examples add layers of accountability to NGO activities and, to the degree that they fail to
exhibit responsiveness, NGOs risk their very survival (Wapner 2002, pp. 158-159; Meyer
1999, pp. 110-115).
Wapner correctly points out different types of accountabilities to which NGOs might be
subject,14 but he fails to address the issue of agency conflict (accentuated by the multiple
principal issue), which is likely to cause accountability problems. These problems are
compounded because, without benchmarking, which allows comparisons of firms with
their peers based on similar Standard Industrial Classification (SIC), it is difficult to assess
NGO performance relative to their competitors. Spar and Dail (2002) propose a classifi
cation system similar to the SIC comprised of 10 broad categories in which NGOs operate.
Such a classification might make it easier for potential members and donors to assess how
NGOs are "performing" in a given industry.
While measuring the performance of a service delivery non-profit might be possible?
for example, an industry benchmark might be based on firms and government agencies
working in the same industry?how would one benchmark the performance of advocacy
NGOs (Covey 1995; Edwards and Hulme 1996; Fowler 1997)? Would my membership
dollars have more impact on public policy via Greenpeace or via Friends of the Earth?
What types of proxies might a potential member employ? Further, even if such information
were available, in the absence of a stock market where shares are listed and performance
scrutinized by "reputational intermediaries" (thereby forcing managers to pay attention to
profits) and in the absence of a market for mergers and acquisitions (which allow share
holders to remove non-performing managers), how would external institutions enforce
accountability? While NGOs might have many conceptual similarities with firms, they are
not embedded in an institutional environment that creates incentives for their managers to
behave responsibly. In other words, the potential for agency abuse is far greater in NGOs
than in business firms. Anticipating this, the adverse selection problem in recruiting
managers (agents) is likely to be more accentuated in NGOs in relation to firms. Hence, the
institutional design to mitigate agency abuse needs more attention, not less in the NGO
literature.
The non-profit literature deals directly with the agency problems and even compares
agency loss in nonprofit organizations with governments and firms operating in the same
sector (Ben-Ner 2004; Fama and Jensen 1983). Indeed, these scholars suggest that nonp
rofits have more severe agency problems than firms or governments. They suggest that
agency problems in nonprofits do not arise because self-selecting agents become non-profit
managers. Rather, it is because non-profits lack the competitive and/or democratic orga
nizational structures and the incentive mechanisms to which governments and firms are
subjected. Further, ensuring accountability in multi-product non-profits with multiple
donative and commercial fund-raising activities is even more complex because non-profits
goals "are not only numerous, they are typically vague. Thus it is difficult for society, the
regulatory authority, ...or even the nonprofit itself, to determine the degree to which goals
are being realized...". (Weisbrod 1998, p. 51).

14 For different types of accountability, also see Grant and Keohane (2005, pp. 35-37).

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Policy Sci (2007) 40:221-240 235

NGO efficacy

Institutional efficacy is the final core issue examined in the collective action literature. For
firms, efficacy is measured in terms of profitability in relation to industry averages. The
subfield of business strategy focuses on how firms can earn and protect their profits or rent.
Porter, the leading business strategy scholar, identifies three generic ways to earn and
protect rents: cost leadership, product differentiation, and market segmentation. Since the
publication of Porter's Competitive Strategy in 1980, there has been a flood of research
testing his argument. While Porter privileged market structure and how firms respond to it
as a driver of profitability, a rival conception, known as the "resource-based view of the
firm" (Barney 1991), sought to link profits to key resources that firms possessed.
According to this perspective, firms can create and sustain rents if their key resources (that
is, assets, capabilities, and processes) are valuable, rare, difficult to imitate, and non
substitutable. There are hundreds of papers examining whether firms' profitability is sys
tematically associated with these attributes. It is fair to say that scholars studying firms
agree on and clearly identify how to measure firms' efficacy in terms of profitability.
Nevertheless, they privilege different variables as drivers of firms' efficacy, creating a
healthy debate in the discipline.
On the other hand, it is not clear how one would measure the efficacy of NGOs and
assess the relative salience of the various efficacy drivers. What works and why? On this
final point, political science and sociology literatures are reasonably developed, and the
non-profit scholarship only contributes additional suggestions. These literatures offer
important starting points, but none of the approaches offers a definitive answer for
assessing NGO success.
NGO scholars have paid considerable attention to the conditions under which NGOs
affect government policy and transcend closed political systems. This focus is the strongest
and clearest aspect of these literatures. Keck and Sikkink (1998) identify a broad but
tractable range of goals that activist networks pursue and that can, therefore, be used to
assess the effectiveness of TANs. They argue that TANs seek: (1) to place an issue on the
international agenda, (2) convince international actors to change discursive positions and
institutional procedures, and (3) influence policy change and actor behavior. This line of
work underscores the importance of well-organized and relatively dense international
networks to carry out their typical repertoires of disseminating information (Ron et al.
2005), engaging in persuasion, and exerting pressure, but it offers little discussion of the
role of domestic organizations and ignores the competition with other collective actors?
factors that ultimately influence effectiveness. Likewise, it also ignores the issue of
organizing collective action and how agency conflicts might undermine policy advocacy.
Indeed, many studies of transnational NGOs neglect the importance of domestic actors
or identify sympathetic indigenous actors as only one of several necessary conditions for
successful advocacy campaigns. Global norms and concerns often dominate the issues that
TANs pursue rather than issues responding to local needs or exploring the dynamics of
individuals or individual organizations within the networks. Although TAN scholars are
interested in how NGOs overcome institutional hurdles and resource deficits to achieve
advocacy success, they rarely explore why some campaigns succeed in some places but fail
in others (Price 2003, p. 586). The selection bias makes the factors that determine advo
cacy effectiveness difficult to evaluate. Moreover, these scholars are not concerned with
compromise results, but seek only to explain successes driven purely with value/normative
motivation.

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 236 Policy Sci (2007) 40:221-240

Overcoming a lack of political access is another critical element for NGO success that
both political science and sociology researchers emphasize. Despite expectations that the
"efforts of grassroots and direct actionists are likely to have greater value added when
political conditions are unfavorable" (Price 2003, p. 585), NGOs are observed to have
more of an impact when they have ties to governments or corporations that perceive their
own vulnerability to the campaign. In essence, these scholars find that advocacy is most
effective when publics are already mobilized around an issue and targets are already
receptive to change or vulnerable to network activism. These conditions have an obvious
overlap with the concept of political opportunity structure prominent in social movement
literature. While there can be no doubt that these conditions are important to success in a
number of issue areas in which NGOs are active, political scientists and sociologists do not
explore why and how these conditions arise or their relative contribution to advocacy
success.

Non-profit scholars, in contrast, identify the regulatory environment in which n

profits operate as the key driver of non-profit success. They explore the relation
between tax structures, organizational forms, and donor incentives (Weisbrod 1997),
investigate the impact of cooperation or competition with government agencies on effic
(O'Regan and Oster 2002). The focus on contracts between state and societal actors p
to regulatory details that critically impact non-profit effectiveness and builds on
advances of the political science and social movement literatures for determining
nizational success.

Conclusion

This paper argues that (1) nongovernmental organizations (NGOs) should be conceptu
alized as collective endeavors and (2) instead of creating new theories, NGO scholars
should draw on theories of the firm to investigate core theoretical questions such as under
what conditions NGOs emerge, how they function, and how they impact outcomes. Fur
ther, NGO scholars should learn from the non-profit scholarship, which although
examining the same actor type, has pursued its enquiry in a systematic way. Moving in this
way toward a generalizable theory of NGOs will encourage scholars to think of big
theoretical questions and not get bogged down in details of individual NGOs. For us, the
interesting question is not whether one NGO differs from another. We believe the inter
esting questions pertain to why NGOs operating in similar domains differ in terms of their
structures, objectives, and strategies and with what consequences. A generalizable theory
will foster analytical clarity regarding NGOs' structures, processes, and strategies as well
as facilitate comparisons among NGOs and between NGOs and other collective endeavors.
Scholars in various disciplines study essentially the same category of actor, the non
governmental organization operating under a non-distributional constraint, but emphasize
different attributes and employ different typologies. The traditional distinction that NGOs
and social movements are in the advocacy business and non-profits organization (NPOs) in
the service delivery business is getting blurred. Increasingly, both NPOs and NGOs have
portfolios of activities that include advocacy and service delivery. The next step would be
to begin thinking in terms of a combined category of non-profit, non-governmental
organizations, NPNGOs.
Modeling NGOs as firms is likely to be more useful for some questions than others. We
believe this perspective offers the maximum payoff for understanding why NGOs emerge,
how they structure internal organization to mitigate agency problems, and how they

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Policy Sci (2007) 40:221-240 237

acquire resources. This modeling strategy adds less value for the issue of NGO efficacy,
where the political science and sociology literatures are quite developed, even though they
arguably suffer from a selection bias problem that is rooted in the normative preferences of
the scholars (how "good" NGOs succeed despite the odds). Moreover, the problem is
accentuated by significant reliance on the case study method where case selections are
based on the value of dependent variable, namely, advocacy success. "Large N" studies,
we suspect, would force researchers to examine cases selected on independent variables
(predictors of advocacy success) rather than the dependent variable (King et al. 1994).
While we certainly want to provoke NGO scholars, we also want to encourage con
versations among scholars who broadly study collective action. In addition to modeling
NGOs as firms, one might think of modeling firms as NGOs. Increasingly, firms are
involved in activities subsumed under corporate social responsibility that do not directly
support their core mission of profit maximization. Often, socially responsible activities
cannot be defended with the traditional techniques of project assessment such as Net
Present Value or Internal Rate of Return (Prakash 2000). We are not suggesting that
socially responsible policies are not pursued for instrumental reasons. Nevertheless, careful
research is required to explain why the proclivity for such policies varies across firms even
after controlling for the usual culprits such as industry type and firm size. Arguably, the
normative orientations of managers play an important role in this regard, something that
the theories of firm are ill equipped to address. The study of NGOs and firms as parallel
forms of collective action will, therefore, be useful, as NGO scholarship has paid con
siderable attention to the normative foundations of collective action. By recognizing that
rationalist accounts might be underspecified (Miller 1993), the theories of firm can be
improved. The role of leaders as norm entrepreneurs within firms and how they shape
firms' policies will require close examination.
To conclude, our plea is for reducing the bewildering explosion of theories seeking to
explain essentially the same category of actor: non-governmental actors working under a
non-distributional constraint. Our criticisms are directed at scholars who overstate the
uniqueness of NGOs, underemphasize their collective character, and refuse to engage with
core issues that any collective endeavor is likely to face. Cross-fertilization among scholars
studying different types of collective endeavors will hopefully create new insights that will
move the research program forward.

Acknowledgment We thank Matt Auer, Kristin Bakke, David Baron, Brenda Bushouse, Margaret Levi,
Tom Lyon, Elinor Ostrom, Steve Pfaff, Gary Segura, and Oran Young for comments. Previous versions of
this paper were presented at the 2006 annual conference of the Midwest Political Science Association and
the University of Michigan Business School.

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