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broader scale (national credibility). In our model, N or national activities are a function of local
activities.
NGOs can only engage in activities if they have sufficient funding, that is we assume NGOs
will try to maximize their utility subject to their funding constraints, F.
F p
1
(L) + p
2
(N(L))+ C
(2)
where p
1
denotes the cost of local activities such as tree planting, giving credit to poor women etc
and p
2
denotes the cost of national activities such as active lobbying, for example, protesting the
closing of national parks and C is corruption, which is wasted resources. If N was not a function of
L, the optimization problem would yield an optimal N* with all the resources being allocated to
national activities. Yet N cannot be implemented unless the membership size is large enough. That
is, it is not possible to allocate all the funding for N to maximize utility and success. Local benefits
are required to attract membership, thus N is an increasing function of L. This is because the
government would be reluctant to find the NGO and its protests credible enough if the organization
possessed an unimpressive membership base. Thus, we posit that N increases linearly with M or
membership base. In return however, attracting membership requires that the NGO is able to tailor
its activities to satisfy the needs of the local population. Even if engaging in L might bring less
utility (success) for the NGO particularly at the national level, the organization must allocate some
of its funding and efforts to the local levels to provide benefits to potential members. This in return
can be expected to increase the membership size that will enable the NGO to implement broader
activities and engage in lobbying efforts at the national level. The following two equations reflect
this simple relationship between L, M and N.
M= kL and N=sM thus N=ksL
k, s>0
(3)
Convention