IESE Insight

When more isn't better: welfare NGOs and increasing income inequality

When there are many social assistance NGOs in a community, they begin to compete for resources.
January 25, 2017
image_pdf

After a certain point, having more NGOs actually increases income inequality because they battle for resources. The message is clear: even in altruism, competition can't be ignored.

How to reduce income inequality? A study challenges the conventional wisdom that more is better when it comes to welfare NGOs. IESE's Pascual Berrone and co-authors find that, after a certain point, having more NGOs actually increases income inequality because they battle for resources. The message is clear: even in altruism, competition can't be ignored.