Too close for comfort? the impact of official aid on nongovernmental organizations

In promoting a “New Policy Agenda,” bilateral and multilateral donor agencies are keen to finance nongovernmental organisations (NGOs) and grassroots organizations (GROs) on the grounds of their economic efficiency and contribution to “good governance.” This paper reviews the impact of this trend on NGO/GRO programming, performance, legitimacy and accountability. If finds that much of the case for emphasizing the role of NGOs/GROs rests on ideological grounds rather than empirical verification. In addition, though the evidence is inconclusive, there are signs that greater dependence on official funding may compromise NGO/GRO performance in key areas, distort accountability, and weaken legitimacy.