Constructive regulation of non-government organizations

Most of the world's population lives and works in the informal sector. A key role of Civil Society Organizations, such as NGOs, is to develop community capacity to link with formal sector institutions. Regulation of NGOs themselves can legitimize their role, improve their professional standards, and assure accountability to the general public. Care should be taken not to excessively regulate, which restricts innovation and outreach of NGOs. Constructive regulation should include simple registration, self-help regulatory mechanisms, and formal regulation of important services such as microfinance. Drawing on experience in Bangladesh and Dominican Republic, the author demonstrates how regulation can improve the effectiveness of development intervention of NGOs.