An Evolutionary Economic Perspective on Small-Scale Development Organizations: Developing a Typology of Small-Scale Development Organizations Based on the Influence of Relationship Types on Learning Strategies

Abstract

Literature categorizes donor organizations based on arbitrary limitations in size and voluntary character. Using an evolutionary economic perspective and literature on firm relations, this research defines a more fundamental distinction of donor organizations based on their relations with development organizations and back donors. Based on this distinction between donor organizations, it is possible to develop a typology of three types of development organizations that relate to these donors. Based on this typology three research questions probe the relations between organization types and learning strategies. These questions are explored using qualitative methods. The research finds that development organizations can have either arms-length or embedded relations with their donors, and their donors can also have either arms-length or embedded relations with back donors. Organizations with arms-length relations experience more competition and have to use learning strategies more actively in order to secure access to donor funding. Three specific mechanisms are suggested by which these relationship types influence the use of learning strategies through selection pressure. It is proposed that these mechanisms could be further examined using quantitative evolutionary economic techniques. As an example a limited quantitative analysis is carried out on knowledge exchange between small-scale development organizations. In conclusion, this research proposes a useful new perspective on small-scale development organizations and offers a firm theoretical and empirical basis for further research of the development sector using evolutionary economics.