University of Wisconsin–Madison

Cost Analysis of Humanitarian Action

During the past two decades, economists have published an enormous volume of work on development and humanitarian programs. However, most of this research focuses on the impacts of development and humanitarian programs – with implementation costs given relatively little attention. Nonprofit organizations respond to an implicit pricing mechanism that reflects the programs donors are willing to fund and the budgets they are willing to accept.

In this presentation, Caitlin Tulloch of the International Rescue Committee (IRC) will use a new set of average-cost data points from a large humanitarian nongovernmental organization to develop a theory of average-cost functions for humanitarian nonprofit organizations and make an initial description of their functional form for several kinds of outputs.

Tulloch also will discuss how implicit price ceilings formed by donor guidelines follow the same intuition as price ceilings in the private sector and will walk through the welfare consequences of a new cost-efficiency threshold from the European Civil Protection and Humanitarian Aid Operations.

A technical advisor, Tulloch previously interned in the Public Financial Management Unit of the World Bank in Indonesia and was a policy analyst in the Poverty Action Lab (J-PAL) at Massachusetts Institute of Poverty, where she managed the organization’s cost-effectiveness analyses. Her work has included long-term policy engagements with the governments of Ghana, the Dominican Republic, and others.