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In this edition of Research in Public Policy, the spotlight falls on charities. The National Council for Voluntary Organisations has warned of swingeing cuts to the sector’s income from government. The question is whether money from other sources – notably donations – can fill the gap.
Economists have long been interested in the relationship between government funding and donations, in particular, the question of whether government money “crowds-out” voluntary income. Three articles summarise new evidence from the UK, US and Canada. The picture that emerges is complex and suggests that the effect of changes in grant funding are likely to depend on where the cuts fall and how they are implemented.
The current government has signalled its desire to increase the level of charitable giving. Rather than using traditional tax incentives, however, a series of workplace trials run by the Cabinet Office in collaboration with CMPO PhD student, Michael Sanders and the Charities Aid Foundation, have explored new ways of encouraging donations through behavioural nudges. The results suggest that relatively small scale – and cheap – interventions can have quite powerful effects on levels of giving.
Finally, we report on a major conference held by CMPO earlier in the year – the Economics of Public Service Reform – summarizing the papers and the debate at the two policy panel sessions. The first of these discussed the role of competition in healthcare and recent UK reforms from both a regulatory and healthcare provider perspective. The second panel focussed on public services provision in developing countries and the use of field experiments to learn about ‘what works’. It highlighted the opportunities that developing countries offered to learn about service delivery due to the specific market structures in operation, and also put forward a defence of the use of performance related pay for public service workers in developing countries.
Helen Simpson and Sarah Smith
Download the complete publication 'Research in Public Policy - Issue 16' (PDF, 2,820kB)
