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Abstract
Based on a 25-country econometric model of NGOs, the authors explain the growth and legal impact of NGOs by disentangling the contributions of economic forces, donor aid and the legal environment in the so-called ‘transition’ economies of Eastern Europe and the Former Soviet Union. They find that while greater civil liberty has had a positive impact on NGO proliferation in the Balkans, it has actually reduced their number in Central Asia. Conversely, NGOs have had a positive impact on many aspects of the legal environment in Eastern Europe and the Western FSU, though not in the Caucasus or Central Asia. Increases in NGO activity, however, have often led to increased corruption (though the inverse has generally not occurred). Donor aid has not had a uniformly positive effect on promoting NGOs: depending on the region, donors and NGOs may act as complements or substitutes for services. Finally, while there are positive income effects on NGO growth, improvements in telecommunications infrastructure have by far a greater impact on NGO activity.