In many countries non-governmental organizations (NGOs) play a critical role in democratization by both promoting citizen oversight of the government and providing services. However, there is conflicting evidence on how these NGOs affect political behavior and institutional development. I develop a new theory that conceives of NGOs as information signals that affect an individual’s perceptions about the government’s credibility and about their neighbors’ likely political behavior. In doing so, I argue that changes in the prevalence of NGOs in a community also reshapes the social institutions that incentivize or undermine political participation. I test my theory with original survey data from Nairobi’s informal settlements and find that individuals who live in areas with more NGOs are significantly less likely (by about 35%) to monitor or support government services. I also find that individuals’ political behavior is strongly and positively linked to their expectations of their neighbors’ behavior, and that expectations about neighbors’ political behavior is negatively linked to the prevalence of NGOs in a neighborhood. My empirical approach confirms that the results are not driven by selection effects or by variation in the supply of government services or capacity.
Working paper available upon request.
