Essays on the Voluntary Provision of Public Goods

Abstract

Chapter 1.---Non-governmental organizations (NGOs) compete in mission statements. Opportunities for impact vary across issues---NGOs with broader missions expect to execute higher-impact projects but provide less precision to donors as to the types of projects that will be funded. I develop the first model in which competing NGOs strategically design their mission statements. Scope of the mission is a strategic complement. Competition leads NGOs to design inefficiently narrow missions while free entry leads to a socially excessive number of NGOs in operation. With low barriers to entry NGOs' missions overlap, each addressing issues that are not the preferred issue for any of its donors, and leading to greater expected impact at the periphery of its mission.

Chapter 2.---In many settings firms rely on non-governmental organizations (NGOs) to certify pro-social attributes embodied in their products. I develop a model of competition between NGOs in the provision of labeling services. Competition between a fixed number of NGOs features a race-to-the-top in labeling standards, but entry of NGOs offering new labels pushes standards down. Competition between NGOs often results in a socially-excessive number of labels, with each label excessively stringent. Compared to a setting in which firms can credibly communicate the social attributes of their products, labels demand greater pro-social behavior than desired by firms, although with proliferation of the number of labels this discrepancy disappears. In contrast to existing models, firms may engage in excessive corporate social responsibility when they rely on NGOs as certifying intermediaries.

Chapter 3.---The intrinsic motivation of a firm's management for engaging in pro-social behavior is an important determinant of a firm's social conduct. I provide the first model in which firms run by morally-motivated managers engage in corporate social responsibility (CSR) in a competitive setting. CSR induced by moral management crowds out a competitor's strategic CSR, increasing profitability and leading shareholders to strategically delegate moral managers. Firms run by moral managers can engage in a socially-excessive amount of CSR, and shareholders appoint such managers if and only if moral management is sufficiently effective at crowding out a competitor's strategic CSR.