A Substitution Effect occurs when an organization takes over for local capacity and reduces or replaces local efforts.

Substitution Effects result in authorities’ loss of capacity

When systems that should be supported by a local governing authority are pushed onto NGOs or usurped by them, the governing authorities may well forget that they once had responsibility for that system or they may lose the competence they had (even if weak) to perform the function.

When governing authorities lose sight of services that the people expect them to oversee, then the authority loses some legitimacy. Over time, the authority can become sufficiently delegitimized that people will no longer respect it or comply with its regulations.

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Related Topics
Why do negative Substitution Effects happen?
Using Substitution Effects
Resource Transfers