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“What are the incentive dynamics for an ideological NGO operating on a large scale, along the value chain, in the recycling sector, and how may this affect its contribution to recycling?”
To narrow this down and answer it, several case-specific sub-questions need to be considered. Regarding general incentives that are in place, that will be the following questions:
1. What incentives did Tzu Chi as an organization have to operate in the recycling sector over time?
2. What incentives does the Da.ai Technology Corporation have over time?
Regarding the interaction of these incentives, that will be the following
3. How did the incentives of the Tzu Chi foundation interact and change over time?
Regarding the effects on recycling success:
4. What have been Tzu Chi’s and Da.ai’s recycling activities?
5. What have been their effects on Taiwan’s recycling success?
Regarding theoretical lessons:
6. How can this example be generalized to understand the potential role of an NGO?
3.2 Conceptual framework
The literature reviewed in chapter 2.2 has brought up several important parties and relationships within recycling sectors that are commonplace. Subsequently, a framework is constructed to investigate the dynamics between the different institutions in recycling, with a focus on the role of Tzu Chi as an NGO.
The key actors in the framework to study will –quite evidently, from the previous analyses- need to be the private sector, the public sector, the community and the Tzu Chi Foundation representing the NGO section. With the exception of the Recycling Fund
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included in the diagram, the rule is: the higher up in the picture, the higher the position in the value chain identified by Wilson et al. (2006) (chapter 2.2, figure a)
The visual outline depicted below in figure b bases off the ‘map’ of the recycling sector by Bor et al. (2004), that will be further discussed in chapter 4.1.2, and forms a means of understanding the structure of the Taiwanese recycling sector.. Moreover, as it is less relevant to the topic of study, the producers paying into the fund have been left out.
Please do note thet this is not the conceptual framework yet; it displays the Taiwanese recycling sector, based on which the framework will be set up.
Within this system, the community, through consumption, produces recyclables that are collected by municipal collectors, private- and sometimes informal- collectors such as scavengers, and the Tzu Chi Foundation. Most of these are sold to wholesalers and larger scale private collectors, who receive money from the national recycling fund to operate;
money that thus trickles down to the other actors, too. These wholesalers and collectors typically sell it on as a resource to industry, sometimes already pre-processed. The Tzu
Da.ai Technology Private
collectors, wholesalers
Community Municipal
collection
Tzu Chi Recycling
fund
= Money flow = Material flow Private
collection
Figure b - structure of the Taiwanese recycling sector. Source: adapted from Bor et al. [2004)
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Chi Foundation however sells a large share of its collected PET-bottles, and in recent year also other recyclables, to Da.ai Technology.
Da.ai Technology is a recyclable processing and Research and Development (R&D) company that was initiated by Tzu Chi volunteers, some say at the suggestion of Cheng Yen. Its equity is in the hands of the Tzu Chi Foundation, and its profits get donated back to the Tzu Chi Foundation. It purchases its recyclables only from the Tzu Chi Foundation, and makes and sells emergency products such as blankets and prefabricated housing, all made out of recyclables, back to the Foundation. When considering Tzu Chi’s recycling activities, it will thus also be a relevant actor to consider in this structure.
The right hand side in the diagram is reserved for Tzu Chi and Da.ai, whereas the center (aside from ‘community’) includes government organized institutions. On the left, there is the private sector, which is visibly quite well integrated in the system, as opposed to the Tzu Chi Foundation. A final note must be made regarding the top arrows flowing from the NGO and industry entities; these flows are not topic of study, and would most likely involve a plethora of actors such as consumers, other industry parties, and Tzu Chi’s aid recipients. For simplification, these are regarded as flows in- and out of the system.
Following the theoretical work done by Frey and Jegen (2001) and Tang and Tang (2014), the set of incentives that are in place in the institutional environment will be taken as a key topic. Observing how these affect the Tzu Chi Foundation’s interests, and subsequently actions, the dynamics between the incentives will be determined, as well as the impact of the organization on recycling success.
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Table 4 - Conceptual framework. Source: own.Recycling success
Ecological goals from Baud et al. (2001): see Chapter 3.2.1
Community
Incentives Incentives Incentives Incentives
This research focuses on the influence of the NGO on the right hand side, and the incentives that are in place for the NGO; the variables will thus only be considered for the Foundation. However, following Hodgson’s (2006) assertions that organizations are comprised of individuals and should be studied with consideration of them, individual incentives of Tzu Chi Foundation volunteers will be taken into account for completeness;
but in order to make an analysis of the impact on the whole system, the organization will be considered as an actor, thus requiring focus on communications from the organization as a whole.
Through the framework, the impact of the set of incentives on the Tzu Chi Foundation’s and its volunteers’ interests and subsequent behavior is analyzed for a number of different identified periods of time. Then, it is compared in terms of its contribution to national recycling numbers to observe its contribution to recycling success. Whereas an earlier goal was to incorporate the whole of Baud et al.’s (2001) goals for recycling
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concern total recycling of paper and plastics. Finally, the evolving incentives over time become subject of scrutiny, to understand how these interacted and developed, and structurally impacted recycling success.
The framework furthermore separates ‘incentives’- i.e., the factors that motivate- from the resulting view of the actors’ interests, to get a clearer picture of how incentives are perceived and lead to action. Generally, incentives are studied as to how they affect behavior- for example, in Lyer et al (2007)- but to display the interaction, the extra
‘interest’ variable is displayed, attempting to capture how incentives are interpreted and subsequently affect the behavior- i.e. actions- of the NGO.
3.2.1 Operationalization
The above framework, though correct, is still a general one. When using this framework, it is useful to zoom further in on only one or two streams of materials. This framework cannot be applied to some streams, as they for example do not fall within the Recycling Fund or within Tzu Chi’s scope of activities. Therefore, the focus will be on plastic and paper, which following table 6 on the next page are two recyclables that fall within the Recycling Fund (EPA, n.d.), are also recycled by the Tzu Chi Foundation (Tzu Chi Foundation website, 2011) and consistently make up two of the largest classes of recyclables in Taiwan (EPA, 2016a)
Case studies, as seen from the literature review, are an often-used tool when observing MSW-systems and recycling systems. Gerring (2007: p. 19) defines a case as a “spatially delimited phenomenon (a unit) observed at a single point in time or over some period of time.” It is thus important to stipulate, apart from the phenomenon, a time-period or point in time. The period in time in this thesis will be from the beginning of Tzu Chi’s recycling until the start of the study. The case studied is the recycling done by Tzu Chi as a part of the Taiwanese institutional recycling environment.
A point worth mentioning here is that the plastic bottles processing are legally done by another organization, Da.ai Technology. However, this organization, which calls itself a
‘non-profit company,’ was started by the Tzu Chi Foundation, still holds intensive
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operational ties, is owned by the Tzu Chi Foundation, and donates its full income after expenses to the Foundation. For analytical purposes in this thesis, it will therefore mostly be assumed to be under the label NGO/Tzu Chi.
For measuring recycling success, Baud et al.’s (2001) definition would be ideal. However, to avoid over-complication, the analysis in this thesis focuses on the ecological sustainability goals, as these have public statistics available and can thus be analyzed more exact than most others; nevertheless, establishing a direct statistical link is not attempted. These statistics provide an image of the trend and are related to qualitative sources throughout the analysis.
Table 5 - Ecological Sustainability (Recycling Success). Source: Baud et al. (2001)
Ecological sustainability
1. Minimal household waste production
EPA statistics;
MSW/capita/day (kg)
2. Maximization of material re-use and recycling
Recycling
percentages of Tzu Chi and EPA.
Table 6 MSW composition in Taiwan - Source: EPA website (n.d)
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