J. Morales2026-03-222026-03-22201710.23881/idupbo.016.2-1ehttps://doi.org/10.23881/idupbo.016.2-1ehttps://andeanlibrary.org/handle/123456789/71365This paper uses a model of vote over public finances to show that when nongovernmental organisations deliver development aid, beneficiaries have incentives to reduce electoral support for state-led redistribution. As a result, NGOs can crowd out governmental spending, turning private aid into a negative externality for the poor who do not directly benefit from it. I model the choice of a representative NGO, which faces a trade-off between targeting beneficiaries with higher needs, and reducing costs. I characterize the conditions under which this targeting affects the size of the externality and describe how it affects the welfare of beneficiaries and non-beneficiaries.esExternalityIncentiveRedistribution (election)DemocracyWelfarePublic economicsBusinessEconomicsPublic spendingPublic goodarticle