Abstract
In the last 25 years or so due to growing disenchantment with the functioning of the government and the fear that ‘market’ may not reach everywhere, NGOs have increasingly been recognised as a ‘third’ institutional pillar for the development of an economy. The issues that loomed large in the form of growth of the economy during the 1960s and 1970s were supplemented in 1980s and 1990s, with issues pertaining environment, gender and decentralised governance leading to ‘people-centred’ development. NGOs as a ‘third sector’ of the economy provided an important institutional fill-up for issues not adequately addressed by government or market. With so much at stake with respect to NGOs, it is necessary to evaluate their performance so as to ascertain their effective role in the process of development of an economy. A review of the literature indicates that most studies at a descriptive level relate either to their evolution or functioning, and at theoretical level (in organisational theories and in economics) to their being ‘institutions’ distinct from government and market. Both these aspects, though important, call for the need to study the performance of NGOs as they are regarded as catalysts for sustainable development with unique and complex organisational characteristics. The present article, in order to fill the gap in the literature, addresses the issue of evaluation of the functioning of NGOs and focuses on the methodological issues of performance evaluation.
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