Non-governmental organizations (NGOs) seek political influence through the provision of information directed towards political representatives. In addition, NGOs also frequently apply means of political pressure, for instance through exposure of the issues at stake in the media. To understand how NGOs obtain impact on political decisions, one must analyze the mechanisms that makes it rational for the politician to comply to these less formal political activities. With the use of tools and concepts from economic theory, I provide an explanation of why and how NGOs have political influence.
This thesis develops a model that provides several predictions regarding these questions. Large policy responses are likely to be observed on complex issues of significant public interest. If the conflict of interest between the incumbent and the NGO under these circumstances is large, the NGO can start an informational cascade via the media, which consequently put pressure on the incumbent to change its policy. We do not however expect to see much impact on policy from NGOs in situations where we have a noncomplex issue of large public interest. In this situation the incumbent will emphasize the median voter, at the same time as there is no scope for the NGO to start an informational cascade.
The model also gives predictions related to the distribution of resources between competing NGOs’. Given a situation where the issue is of little public interest, the model’s prediction is in line with the conventional theory, that the NGO with the most resources will gain policy influence. However, in situations where the specific issue is complex and of large or moderate public interest, the distribution of resources between the NGOs will be of little relevance for the final policy. In fact, the model predicts that a poor NGO can win the competition over policy if its interest of conflict with the incumbent is sufficiently strong. Although the economic model made for this thesis produce interesting results, it is to consider as a crude understanding of reality, primarily intended as a point of departure for further economic research on the subject.