The Invisible Hand(set) & Mackerel Economics

The Invisible Hand(set) & Mackerel Economics

“Mobile Phones Promote Economic Growth” was the simple, technologically deterministic claim made by The Economist in 2007, citing as evidence Robert Jensen’s now famous study of mobile phone adoption in India. In the single most cited piece of research in the history of ICT4D,  “The Digital Provide”, Jensen studied the price of landed fish in Kerala between 1996 and 2001 before and after fishermen first gained access to mobile phones.

In his study of ICT and development economics Jensen describes how fishermen used their mobiles to phone people on shore in order to identify the best market at which to land their catch, increasing efficiencies, reducing waste, and improving fishermen’s income and welfare. According to Jensen “had it not been for the introduction of mobile phone service, there would have been no differential changes in the market outcomes across these regions over this period.” (2007: 903).

Jensen’s theoretical framework is individualist, rationalist, neo-liberal, free-market economics, and he interprets his data as evidence of the beneficent invisible hand in market economics. He concludes that improved information accessed by mobiles “makes markets work” & that “improved markets help the poor”.

Ten years later Srinivasan and Burrell made a follow-up study. Whereas Jensen had carefully monitored market prices in great detail over five years and then attributed causation to mobile phones, Srinivasan and Burrell adopted a broad ethnographic approach. Their methodology included 80 formal interviews with fishermen, buyers, auctioneers, cooperatives and other stakeholders about their mobile phone use, as well as an analysis of the wider historical, political and regulatory context that shapes the local market.

They found that Jensen’s study focused disproportionately on the experience of trawler fishermen who had access to capital for larger motorised boats. The majority (80%) of fishermen used much smaller, more vulnerable vessels, and for these fishermen risk-prevention, rather than profit-maximisation, was a higher priority. Rather than maximising their income by seeking out the highest-paying market in which to land their catch, the fishermen interviewed by Srinivasan and Burrell reported that they often prioritised safety, existing trading relationships, and increasing time spent at home resting with their family, over profit-maximisation. By focusing on price alone Jensen’s econometric model made invisible other development priorities that fishermen had reason to value. When questioned by Srinivasan and Burrell it transpired that the fishermen defined their welfare more broadly than in Jensen’s sense of income maximisation. Fishermen, especially the majority who worked on smaller boats, valued their mobile phones for use in emergency and for other welfare issues left out of Jensen’s study. 

Srinivasan and Burrell also found that other factors determined price including the operation of fishermen’s cooperatives, market regulations, human bonds of trust and of debt between fishermen, money lenders and auctioneers, as well as collusion among buyers to fix prices and to take punitive action taken against fishermen who sold to non-locals. Kerala’s fishermen had historically organised themselves in cooperatives to access loans and to enforce regulations on markets and over-fishing. These collectivist factors were important in shaping market prices but were not captured by Jensen’s narrow econometric measurement of market prices. 

Seen through these alternative lenses, Jensen’s definition of the development problem as being one of how “to maximize profits by choosing where to sell their fish” (Jensen, 2007, p. 815) tells us more about his own preconceptions and choice of focus than it does about the actual development priorities of the fishermen themselves. His econometric framing had the effect of making invisible historical and social factors, as well as details of the local political economy, that are generally the context for markets sometimes imagined as ‘open and free’. Jensen’s study limited its field of vision to mobile phones and prices alone. As a result it concluded that mobile phones changed market prices and created the illusion that the main importance of mobile phones to fisherman was to access market price information.

Since Srinivasan and Burrell, other ICT4D studies have confirmed the need to look at the bigger picture in order to understand the development priorites and realities of Kerala’s fishermen.    

Beyond Access to Information 

It might reasonably be asked, what is the point of replacing Jensen’s neat and simple explanation with Burrell’s ‘fuzzy’ and complicated alternative?

It is of importance, not least because of funder impatience to scale up. If we scale up ICT4D by generalising simple ICT fixes for what are complex and highly contextual development problems then the number of ICT4D failures will certainly increase. In order to inform ICT4D policy and practice it is better to have an accurate explanation of a fuzzy reality than a simplified and clear but fundamentally incomplete explanation. To inform future ICT4D, research needs to interpret the relationship between ICT and Development in it wider historical, social and political context. By doing this in their study Srinivasan and Burrell make visible the multi-faceted and contextually dependent nature of the development reality.

When viewed from this perspective it becomes clear that development is not reducable to access to information via new technology

Srinivasan and Burrell conclude that when researchers restrict their consideration to technical factors alone they make invisible power relations and social processes that are of central importance to a comprehensive understanding of the realtionship between ICT and development.

To avoid such technocentric ICT4D solutions Jenna Burrell has more recently proposed a broader ecosystems perspective. To make the non-technical visible she recommends using frameworks such as actor network theory. This approach has some clear advantages about which I have blogged here: Buddhist Philosophy of ICT4D.

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