The Unintended Consequences of Ngo-Provided Aid on Government Services in Uganda

This paper studies the impact of the entry of a large foreign NGO which provides basic health services on the government’s capacity to provide similar services in rural Uganda. In villages with a government health worker at baseline, the NGO hires the government worker in half of the villages it enters. Where “poaching” occurs, overall healthcare and infant mortality worsen. In villages where the NGO hires a second worker who is not the government worker, health outcomes improve. In villages with no government health worker at baseline, NGO entry improves healthcare and health outcomes, but increases the closure of village schools, the other public good that relies on skilled labor, and reduces school attendance. Our results support the concern that NGOs can have unintended adverse effects on government services in contexts where skilled labor is scarce