Sangli is in Haryana, where Green Revolution techniques (high yielding seed varieties, chemical fertilizers and pesticides, and agricultural machinery like tractors and threshers) were adopted early on. It also happens to be close to the industrial belt that extends from the national capital Delhi to its surrounding districts, where foreign capital has congregated in the neoliberal era. This makes it an interesting place to study processes of generation and re-investment of agrarian surpluses, and to peer into the relationship between “modernized” agriculture and neoliberal industrial and urban growth that has dwarfed the rural economy.
Informal savings group in Tarime district, Tanzania. Photo: Daivi Rodima-Taylor
Self-help groups can be found in many areas of Africa—including the chama groups of Kenya, isusu of Nigeria, and stokvels of South Africa (Ardener and Burman 1995). Their customary rotating credit arrangement is also popular among African diaspora communities (Hossein 2018; Ardener 2010). A significant rise has occurred in these groups at the wake of the neoliberal restructuring reforms of the 1980s-90s, with a decline in formal sector employment and state-funded producer cooperatives. At present, these mutual support groups are targeted by FinTech platforms as well as conventional banks with various financial products and software apps. My recent research explores of the contentious interplay between the formal and informal finance in these emerging digital interfaces in Africa. It studies the intersection of FinTech with the social economies of African mutual help groups in Kenya and South Africa, situating this dynamic in longer-term colonial legacies and present-day policies of extractive financialization (Rodima-Taylor 2022).
Informal mutual support groups with their saving-credit patterns have long served as an inspiration for the development industry. The initially successful Grameen micro-finance model drew on pre-existing reciprocities and mutually negotiated liability in largely informal contexts. However, as the microfinance formula shifted from socially situated lending towards ‘fast-scaling’ and universalizing group lending in an expanding range of localities, the industry was faced with repayment crisis (see Haldar and Stiglitz 2016). The recent conceptual shift from microfinance to digital financial inclusion foregrounds mobile payments and fee-based service delivery, with payment industry also experimenting with new sources of value such as customer data (Maurer 2015). Microloans have remained an important part of the digital financial inclusion enterprise, with poorly regulated lending apps fueling over-indebtedness. As informal savings groups and mutual support associations have become central in the livelihoods in many low-income communities, I suggest that more attention is needed to the intersection between the self-help groups and FinTech initiatives in the global South.
In collaboration with EADI and King’s College, London, Developing Economics has launched a new podcast on Hierarchies of Development.The podcast offers long format interviews focusing on enduring global inequalities. Conversations focus on contemporary research projects by critical scholars and help us understand how and why structural hierarchies persist. Join hosts Ingrid Kvangraven (KCL/DE) and Basile Boulay (EADI) for this series of discussions on pressing issues in the social sciences.
In Price Wars: How the Commodities Markets Made Our Chaotic World, sociologist and filmmaker Rupert Russell travelled to some of the world’s most chaotic places: war zones in Ukraine, Iraq, and Somalia, the climate wars in Kenya and Guatemala, and Venezuela’s economic catastrophe. Told as gonzo investigation into what made the 2010s so tumultuous, Russell links each of these eruptions to swings in commodity prices, and the financial speculators whose bets set their prices.
The race to pay drivers as little as possible is underway in Indonesia. In this competition, the participants are platform companies in online transportation services, such as Gojek, Grab, Shopee Food, Maxim, InDriver. Some researchers argue that competition between platform companies will create equilibrium prices, also called a race to the middle, which is considered positive.
This positive assessment of the platform’s inter-corporation competition is rooted in the neoclassical economic notion of perfect competition. In this theoretical framework, it is assumed that competition equalizes supply and demand to create a balance of goods prices, wages, and profits; the results of which will create mutual benefits. Therefore, the preconditions for such competition are emphasized as important from a policy perspective. These preconditions include strong legal systems to support the operation of the ‘free’ market and the minimization of state intervention, which is thought to distort market price signals.
However, the story of perfect competition is far removed from how competition actually plays out. Indeed, capitalism is not as harmonious as the neoclassical framework suggests. This has led to the recognition of imperfect competition within the neoclassical framework. Stiglitz, for example, sees that markets may not work perfectly because of information asymmetries. The Marxist economist Anwar Shaikh has proposed an entirely different view of competition. For him, what takes place in capitalism is not perfect competition, but real competition. In a real competition framework, there is competition between companies to cut production costs so as to enable them to lower commodity prices below those of their competitors. With lower prices compared to their competitors, their commodities tend to be chosen by consumers. This means that competition is a fight to beat rival companies, which often leads to a process of centralization: the strong get stronger and the weak get competed out of the market.
There is growing interest in ‘embedded experiments’, conducted by researchers and policymakers as a team. Aside from their potential scale, the main attraction of these experiments is that they seem to facilitate speedy translation of research into policy. Discussing a case study from Bihar, Jean Drèze argues that this approach carries a danger of distorting both policy and research.
Evidence-based policy is the rage, to the extent that even village folk in Jharkhand (where I live) sometimes hold forth about the importance of ‘ebhidens’, as they call it. No one, of course, would deny the value of bringing evidence to bear on public policy, as long as evidence is understood in a broad sense and does not become the sole arbiter of decision-making. However, sometimes evidence-based policy gets reduced to an odd method that consists of using randomised controlled trials (RCTs) to find out ‘what works’, and then ‘scale up’ whatever works. That makes short shrift of the long bridge that separates evidence from policy. Sound policy requires not only evidence – broadly understood – but also a good understanding of the issues, considered value judgements, and inclusive deliberation (Drèze 2018a, 2020a).
Enormous energy has been spent on the quest for rigorous evidence, much less on the integrity of the process that leads from evidence to policy. As illustrated in an earlier contribution to Ideas for India (Drèze et al. 2020), it is not uncommon for the scientific findings of an RCT to be embellished in the process. This follow-up post presents another case study that may help to convey the problem. It also illustrates a related danger – casual jumps from evidence to policy advice. The risk of a short-circuit is particularly serious in ‘embedded experiments’, where the research team works ‘from within’ a partner government in direct collaboration with policymakers.
The case study pertains to an experiment conducted in Bihar in 2012-2013 and reported in Banerjee, Duflo, Imbert, Mathew and Pande (2020)1. This is a large-scale, influential experiment by some of the leading lights of the RCT movement – indeed, a formidable quartet of first-rate economists reinforced by one of India’s brightest civil servants, Santhosh Mathew. The high technical standards of the study are not in doubt, and nor is the integrity of the authors. And yet, I would argue that something is amiss in their accounts of the findings and policy implications of this study.
Last year in February, Professor Ian Taylor of the University of St Andrews passed away after a short struggle with cancer. Ian was a world-renowned scholar in the fields of African Studies, International Relations and Global Political Economy. Besides his remarkable academic achievements, Ian was an extremely passionate educator as well as a kind, humorous and supportive colleague and friend to many of us. This is a modest attempt to pay tribute to an inspiring intellectual and true friend of Africa.
Together with his twin brother Eric, Ian grew up on the Isle of Man, before the family relocated to West London where he spent his teens and would become a die-hard Brentford FC supporter – in his words a ‘100% local club’. Whilst there were few points of contact to Africa on the small Crown dependency in the Irish Sea, Ian, early on, developed an interest in Africa, as he heard stories from his grandmother whose parents had lived in South Africa, and where a large network of relatives still live.
After reading History and Politics at what was then the Leicester Polytechnic, Ian used a gap year in 1991-92 for his first travel to southern Africa – obviously at quite a formative time for the region. This trip clearly left a firm impression on him, as he would return to the region throughout his life. However, first he joined Jo, the love of his life whom he met in South Africa, when she took up Ph.D studies at the University of Hong Kong in 1994. Ian enrolled himself for a Master’s there. His 368-pages M.Phil thesis on China’s foreign policy vis-à-vis Africa laid the cornerstone for one of his research specialisations and arguably also for a new sub-discipline, China-Africa studies. One of his first academic articles, an output from his M.Phil research, was published in the Journal of Modern African Studies and has since been cited 357 times (Taylor 1998). Exactly 18 years later, Ian became co-editor-in-chief of this prestigious journal, together with Ebenezer Obadare.
Wherever you go in contemporary Nairobi, you will find yourself confronted with images of economic success. Whether the suited and smiling young professionals on the Safaricom billboards, celebrating the speed of their new data bundles, the fleet of range-rovers that block the streets in the gridlock hours of commuting, or the synthetic marbled fortresses (the office towers, the luxury flats) – Nairobi’s wealth announces itself over and above the streets below: Streets of kiosks selling warm soda, vendors (‘Mama Mbogas’ – the stereotypical figure of market trader women selling vegetables and fruits from the city’s rural hinterlands), construction workers eating chapo (chapatis)on breaks; Streets of boda-boda (motorcycle) drivers talking to each other in the sun, streets of fundis (mechanics) hammering crumpled matatu minivan doors back into shape; Streets where students gather in groups outside the University of Nairobi, where aspiring politicians argue in Jevanjee Gardens. Images of wealth barely conceal inequality, the reality of the informal economy in which the majority of Kenyans work with their ingenuity and hands to accrue cash, the lifeblood of social reproduction.
Drawing on over 21 months of fieldwork conducted on the changing peri-urban peripheries of Nairobi, this blog draws attention not only towards the city’s shifting landscape of urban inequality, but also desire – of aspirations for better lives, membership in a developing Kenya evoked by the visible presence of vast wealth, evident especially in the material lifestyles of the city’s nouveaux riches, whether wealthy business and political elites or the posh ‘mapunk’, a pejorative Sheng term for those youth wealthy enough to have grown outside the ghetto. But for the Kenya’s aspirant youth, the city’s landscape of inequality is experienced not so much as a fixed condition but as a subjective and personal challenge to succeed, to ‘make it’ to a middle-class standard of living possessed by others. The failure to do so produces subjective experiences of stress, failure and disappointment, the product of comparison with the wealth of others. Rather than purely economic pressure, this blog seeks to foreground the mental pressures produced by this landscape of desire, and the pressure to succeed.
As the editors of this blog series write, ‘economic pressure and stress are not confined to the urban poor’. Of Kenya’s ‘hustler masses’, the 80 per cent of the country’s inhabitants who work in the informal economy. The figure of the ‘hustler’ regularly evokes a young man, living in one of Nairobi’s informal settlements, struggling day-to-day for his immediate needs. And yet, as this brief portrait of Nairobi suggests, finer grain distinctions are possible that reveal more complex relationships with ‘economic pressure’ that do not simply amount to the short-term temporalities of day-to-day survival. Whilst short-term needs are hardly absent from Kenyans’ economic subjectivities and their careful modes of economisation, in the long-term Kenyans work hard to accumulate the wealth that affords participation in the New Kenya, and, not incidentally, status and recognition from others. Consider, for instance, the Kenyans pursuing success from such predicaments of economic uncertainty.
‘Lazima huu mwaka niwashangazi’, sings Jaguar in his 2015 hit ‘Huu Mwaka’(This Year). ‘This year I’ll blow their minds!’. Jaguar’s narrator is an aspirant Kenyan whose motivation is not simply self, but self in relation to others – a rural migrant who desires the status and recognition from his kinsmen and neighbours whence he returns from the city with the wealth he has won. ‘A good job, a good house, a good wife’ (‘Kazi nzuri! Nyumba nzuri! Bibi nzuri!’), he sings, imagining the future that lies ahead. ‘I’ll be a rich man like Sonko’, he tells us, a play on words in reference to Nairobi’s now former Governor Michael Mbuvi Sonko, a man who has quite literally appropriated the term ‘sonko’, meaning ‘rich person’ (or sometimes ‘boss’). Regardless of the true origins of his wealth, his identity is one of a ‘hustler’ who has ‘made it’ in life.
Such optimism recalls the now famous narrative that the African continent is ‘rising’ – that economic growth is catapulting countries towards middle-income status, creating new middle classes able to live lives of conspicuous consumption. Since the end of Daniel arap Moi’s de facto one-party state, and the political and economic liberalisation ushered in under Kenya’s Rainbow Coalition (2002-2005), economic growth has shaped the intensification of desires for middle-class lifestyles and their material trappings.
At the same time, such narratives belie the immense economic pressure faced by Kenyans on their pathways towards prosperity. Indeed, the sheer discrepancy between piecemeal incomes (gleaned through irregular labour in Nairobi) and the pressure to succeed, gives rise to feelings of failure, shame, and distress. Such affective states readily evoke ‘pressure’ rather than aspiration, as the authors of this series call it: ‘a cognitive assessment of a real/imagined disbalance between real/imagined economic demands and the real/imagined ability to fulfil them.’