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The use of mobile technology and mobile applications as the next paradigm in development: can it be a game-changer in development for women in rural Afghanistan?
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The use of mobile technology and mobile applications as the next paradigm in development: can it be a game-changer in development for women in rural Afghanistan?
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Running head: USE OF MOBILE TECHNOLOGY 1
THE USE OF MOBILE TECHNOLOGY AND MOBILE APPLICATIONS AS THE NEXT
PARADIGM IN DEVELOPMENT: CAN IT BE A GAME-CHANGER IN DEVELOPMENT
FOR WOMEN IN RURAL AFGHANISTAN?
by
Abdullah Shefa
______________________________________________________________________________
A Dissertation Presented to the
FACULTY OF THE USC SOL PRICE SCHOOL OF PUBLIC POLICY
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
DOCTOR OF POLICY, PLANNING, AND DEVELOPMENT
May 2014
Copyright 2014 Abe Shefa
USE OF MOBILE TECHNOLOGY 2
Dedication
This doctoral dissertation is proudly dedicated to my wife, Lori, with appreciation for all
of her love and patience throughout the process. Let me also acknowledge my sons, Mason and
Spencer, who cheered me on every step of the way; and in honor of my mother and father of
Afghanistan, who taught me that our dreams are valid regardless of our origin.
USE OF MOBILE TECHNOLOGY 3
Acknowledgments
Prepared for Doctoral Committee:
Dr. Peter Robertson (Chair) – Sol Price School of Public Policy, University of Sothern
California
Dr. Hilda Blanco – Sol Price School of Public Policy, University of Southern California
Dr. Ali Farahani – Sol Price School of Public Policy, University of Southern California
Special thanks to:
This doctoral dissertation is a personal contribution to redress the plight of women in
Afghanistan, the country I’m proud to call my birthplace. It reflects my deep desire to help and
support the Afghan women in their quest to improve their well-being. I also wish to thank Dr.
Peter Robertson, Associate Professor at Sol Price School of Public Policy at University of
Southern California, for his extraordinary generosity in guiding me throughout the process.
USE OF MOBILE TECHNOLOGY 4
Table of Contents
List of Figures 6
Abstract 7
Chapter One: Introduction 8
Chapter Two: Development Strategies from “Washington Consensus” and Beyond 17
Growth-Oriented Development 18
The “Washington Consensus” 20
Social Capital 23
Shifting Away from “Washington Consensus” 24
“Millennium Development Goals,” 2005 27
Basic-Needs Approach to Development 28
Human-Centric Development 30
Chapter Three: Human Development, Human Rights, and Human Capabilities 32
Human Development Approach in Development Policy 33
Human Rights and Development 35
Human Well-Being, Human Capabilities 39
Human Development Index 42
Chapter Four: Women’s Development in Developing Countries 45
Women in Human Development 45
Female Marginalization in Economic Participation 47
Gender Inequality in Education 49
Economic Empowerment of Women 52
Women’s Entrepreneurship in Developing Countries 53
Microfinancing and the Development of Women 54
Chapter Five: Social Networks and their Role in Development 58
Social Network Analysis, Social Network Structure 58
Social Network Analysis 59
Social Network Structure 61
Social Capital in Social Networks 64
Social Capital and Economic Development 65
Critiques of Social Capital 69
Chapter Six: Mobile Phone for Development: Advancing Women’s Development 71
and Women’s Capabilities in Afghanistan
Mobile Technology for Development 71
The Use of Mobile Technology in Women’s Development 76
The Use of Mobile Phone Applications for Development in Afghanistan 78
Chapter Seven: Peer-to-Peer (P2P) Entrepreneurial E-Philanthropy: Promoting 83
Women Development in Rural Afghanistan via the Use of
Mobile Technology Applications
Social Lending in the Age of Internet 86
E-Commerce 91
Mobile Commerce 92
The eBay Way 93
M-PESA 95
Peer-to-Peer (P2P) Entrepreneurial E-Philanthropy 98
USE OF MOBILE TECHNOLOGY 5
Project Context 98
Mobile Phone Applications for Development for Women in 100
Remote Areas of Afghanistan
Project Technical Structure 101
Project Scope 103
Stakeholders 104
Strategic Alignment 104
Product Limitations and Risks 104
Chapter Eight: Conclusion 106
Project Implementation 109
Project’s Next Steps 111
In Academia 112
In Nonprofit 112
In the United Nation’s Development Programmes 113
In Corporate Partnership 114
Looking Forward 114
References 115
USE OF MOBILE TECHNOLOGY 6
List of Figures
Figure 1: Illustration of Direct Ties, Indirect Ties, and Structural Holes 62
in Two Networks
Figure 2: M-PESA Model, Innovation (2007) 97
Figure 3: Technical Structure P2P Entrepreneurial and Philanthropy 103
USE OF MOBILE TECHNOLOGY 7
Abstract
A mobile phone revolution is empowering individuals, whether poor or illiterate, to exercise
their capabilities by participating in economic activities at levels unimaginable only a decade
ago. The merger of development theory with capabilities, freedom, and human rights, offers the
most significant change in human development and presents an opportunity to look at mobile
phones as powerful instruments of development in this context. Nowhere is this transformation
to mobile use more visible and far reaching than among the women of Afghanistan. A project
designed as a platform featuring mobile technology for women’s development in rural
Afghanistan is presented herewith.
USE OF MOBILE TECHNOLOGY 8
CHAPTER ONE:
INTRODUCTION
When Barkhad Dahir rolls into the tiny gas station to fuel his car, he doesn’t reach out for
his wallet to pull out cash or a credit card to pay for the gas; he simply gets out his cell phone
and punches in a few numbers. In an instant, he has paid for his petrol. But that’s not all.
Throughout the day, Dahir uses his phone to pay for a few oranges at the small fruit stand at the
market, for his shoeshine at the corner vendor, and for a cup of sweet milky tea from the café.
Dahir is a journalist in a small town in Somalia, and this account was printed by The Globe and
Mail on June 21, 2013. The article quotes Dahir boasting, “Everyone here has his own bank, with
easy access and no restrictions, even laying in bed you can be paying your bills.” The article
quotes Adan Abokor, another Somaliland residence:
I haven’t seen cash for a long time. Even small payments, like bus tickets, can be made
with Zaad (a service of the biggest mobile-phone company, Telesom in Somalia). When
my kids are at school and they want a sandwich, I send them the payment by Zaad. It’s
immediate—there’s no waiting for it, no counting of cash.
These transactions are happening in Somaliland, Somalia, one of Africa’s most illiterate,
impoverished, and least developed countries. Here, in these remote areas of Africa, where
traditional banks are nonexistent for the most part, a new revolution is taking shape that has the
potential to re-invent the broader theories of development.
A mobile revolution is empowering individuals—whether poor or illiterate—to exercise
their capability to participate in economic activities that only a decade ago at were unimaginable.
According to the same article, “In the cities of Somaliland, the future has arrived: cash is
disappearing, credit cards are unnecessary, and daily shopping is speedy and digital. Almost
every merchant, even hawkers on the street, accepts payment by cell phone.” The Zaad mobile
money systems in Somalia, by their nature—and due to necessity—are very simple and secure.
USE OF MOBILE TECHNOLOGY 9
Subscribers use a balance to pay merchants digitally. They dial a three-digit-number along with
their pin and the merchant’s Zaad number to purchase merchandise. A system of text messaging
confirms the transaction instantly, both to merchants and to customers.
The surge in mobile phone use in Africa, and in many developing countries around the
world, has opened a whole new way of sharing information and conducting business. According
to a BBC report, as of July 2012, over 650 million mobile phone subscribers are active in Africa.
But what makes this statistic significant to development is the way mobile phone use has
changed dramatically—from just keeping in touch with family and friends, to a new way of
conducting business in Africa. Many companies in Africa have discovered ways to harness the e-
potential of mobile commerce. According to the BBC, a company called SlimTrader, founded by
Nigerian American Femi Akinde, is an e-commerce website that uses mobile phone platforms for
the exchange of goods and services in Africa. SlimTrader has created a mobile application (app)
called Mobaishara, which allows users to search for products with their mobile phones, and then
purchase those products via text messages. The BBC reported, “This technology provides
retailers’ information and inventory, and it also partners with mobile payment providers such as
M-PESA and MTN so the customers can make a purchase with a press of a button on their
mobile device.” Umuntu Media is another African-based website catering to e-commerce on the
mobile platforms. The platform is designed to tap into mobile e-commerce via a miniboard,
where people in small communities can post notices about wanting to buy or sell something, and
purchasing transactions can happen in a virtual world without any traditional money being
exchanged. This service is unique in that miniboards have their own currency called
“minibucks,” which are recognized by mobile payment providers such as M-PESA and MTN.
USE OF MOBILE TECHNOLOGY 10
This rapid growth of mobile phone and mobile application technologies in many
developing countries is uniquely enabling a segment of the population in the rural areas who
have been, by and large, left out of economic prosperity. According to Smertnik (2012), “These
mobile applications are the mobile phone’s special power, what makes it an enabler and an
amplifier of development by providing everyone, anywhere and at anytime, useful and relevant
information, in addition to facilitated communications” (p. 7). But what makes mobile apps
revolutionary is that many of the “Mobile for Development” (M4D) apps are designed to enable
a wide range of individuals—including many poor and illiterates in many far remote areas—the
ability to access and use mobile e-commerce to participate in economic activities. Thanks to
these different mobile apps already in use, many of these individuals can independently grow
their businesses, individually strengthen their education and training, and fully participate in
healthcare systems.
In Indonesia, according to a report by Qualcomm Wireless Reach, many disadvantaged
and underserved residents—especially among women in the rural area—use a mobile phone and
many of its applications to access business opportunities to extract themselves from poverty.
According to the report, the Grameen Foundation through its mobile phone application
laboratory (AppLab) is providing multitier levels of data services that use existing SMS through
3G technologies built on a mobile platform. The report explained:
Designed to increase incomes of the nation’s poor, these data services can be accessed
through two distribution channels: 1) Village phone operators (VPOs), a social network
of women entrepreneurs who own and operate mobile micro-franchise businesses, and 2)
Commercially distributed phone availability in collaboration with Bakrie Telecom.
Mobile applications, such as AppLab’s Jual Pulsa (top up), allows the poor to earn income by
selling airtime to customers; the information application called Kerja (day job search) allows day
laborers to connect to daily job opportunities. According to the Qualcomm report, “As of January
USE OF MOBILE TECHNOLOGY 11
2012, over 10,000 entrepreneurs have served more than 1 million unique customers. An
estimated 47% of the entrepreneurs who stay in the portfolio for more than four months have
moved above the poverty line, which World Bank defines as US$2.50 per day. At the time of this
study (2014), more than 83% of the businesses was owned by women, 100% of which was
profitable” (p. 3).
Grameen Telecom found similar success among poor women in Bangladesh. A pilot
program that targeted women in 950 villages focused on bringing wireless services to the
country’s poor to help them generate extra income. The program offered up to $175 to women in
rural villages to cover the cost of a mobile phone, a small solar recharger unit, and the training
needed to use and service this equipment (Richardson, Ramirez, & Haq, 2000). The program was
touted as creating an army of women entrepreneurs, who later became known as the “Wireless
Women of Grameen.”
Women in this program increased their income, on average, by about $300 per year.
Smertnik (2012) has elaborated on the concept of mobile technology for development,
explaining that M4D is powerful because it supports a two-sided approach to development. On
one side, “The development paradigm has undergone a ‘shift to embrace the Human
Development’ (Wakunuma, 2008), focusing on education and health rather than exclusively on
national development. This approach suggests that people should be taken as a starting point”
(p.7). According to Adele Waugaman (2009), Director of Technology Partnership, United
Nations Foundation, and Vodafone Foundation, “One of the most transformative aspects of the
mobile communication revolution is that it puts individuals at the heart of humanitarian aid and
development work” (p.14).
USE OF MOBILE TECHNOLOGY 12
Nowhere is this transformation to mobile use more visible and far reaching than among
the women of Afghanistan. According to a report published in May 2013 by the US Agency for
International Development (USAID), Afghan women are benefiting in unprecedented numbers
from the remarkable growth in the mobile phone sector. The same report indicated that, in 2013,
over 20 million mobile phone subscriptions were spread among a population of roughly 30
million people. Also remarkable is that, as of late 2012, over 80% of the Afghan women
surveyed had had regular or occasional access to a mobile phone (USAID, 2013). But the
report’s most striking finding was that over 54% of the women who lived in rural Afghanistan
owned their mobile phone, and an additional 39% of them had some access to a mobile phone
that belonged to a family member. The report also indicated that 94% of the women without a
phone but who participated in the survey said they were not intimidated by mobile technology.
This attitude is remarkable considering that over 82% of the female population in the rural area
of Afghanistan has little or no formal education, with an illiteracy rate among the highest in the
world. As this report elaborated, the impact of mobile phone technology among women in
Afghanistan (like the benefit to women’s development worldwide) can no longer be ignored.
Women with low and middle income surveyed in developing countries indicated that owning a
mobile phone made them feel more secure, more connected, and more productive, while
increasing their incomes and professional opportunities (USAID, 2013). We can safely claim that
the broader implications are that the penetration of mobile technology (in the rural areas of the
developing world) could alter the way we look at development (from an institutional
arrangement to a personal, individual basis) and, most importantly, the way we look at the
capabilities of poor and illiterate populations.
USE OF MOBILE TECHNOLOGY 13
With over 6 billion mobile phone connections worldwide, and with over US$1.3 trillion
in annual revenue, mobile technology is by far the largest information and communication
technology available to individuals, outpacing even lap-tops. Bold and Davidson (2012) have
suggested the following:
Mobile broadband, or high-speed access to the Internet and other data services over
mobile networks, is already changing the way people across the globe access the internet.
It promises to drive even stronger economic growth (than mobile telephony alone) and to
fundamentally change the way in which we live, learn, work, and collaborate. This in
turn is driving [a] seismic shift across the communications and computing industries.
Perhaps more importantly, it provides unprecedented opportunities to empower
individuals across all socioeconomic classes. (p. 67)
For far too long, development theory in the development field advocated that growth in
economic development at the institution level was the ultimate basis of human development.
According to this ethos, human progress is measured by the degree of economic development,
whereby the increased capacity to produce goods and services is considered to improve general
welfare. This theory emphasizes the efficient allocation of labor and resources and the growth of
output in order to increase commerce, produce wealth, generate self-sufficiency, and, ultimately,
improve general welfare.
Merging development theory with capabilities, freedom, and human rights, offers the
most significant change in the development of theoretical strategies, shifting the focus from a
rigid orthodoxy of development policies to human agency and a human basic needs approach.
This change is a striking departure from the old school focus on development, based on the
neoliberal emphasis on free trade, free capital markets, and reliance on natural market forces (as
advocated in many development theories including the “Washington Consensus” (Williamson,
1993).
USE OF MOBILE TECHNOLOGY 14
This project considers this shift in development theory to a focus on human capability as
the cornerstone of development; indeed, it even takes this concept one step further by suggesting
that development enshrined in human capabilities can best be achieved through advancement in
mobile broadband and high-speed access to the Internet and data services. As this project will
explore, mobile phone technology and mobile applications (under the broader umbrella of
Information and Communication Technologies for International Development, ICT4D [Heeks,
2008]) can affect the paradigm shift in development, providing the tools to achieve the goals
(income and jobs for the poor and disadvantage populations in the rural areas) of many
developing countries. If we regard development theory as based on human development in terms
of human capabilities and human agency, then it makes sense to concentrate on how we advance
and enlarge these human capabilities, especially among poor and illiterate populations around the
globe.
Here, we are challenged to look at the poor and illiterate populations around the globe in
a different light—as change agents themselves, whereby investing in their development enlarges
their capabilities. Using mobile phone technology and mobile phone applications has the most
promising outlook for development among the poor and illiterate and may best be achieved by
relying on already-established social networks and promoting social capital among these groups.
A peer-2-peer global philanthropic effort may also be needed to foster and support such an effort
by directly providing funds to individuals via online mechanisms and mobile phones. We can
also promote e-commerce and mobile commerce (m-Commerce) as the conduit for individuals
participating in economic activities that advance their well being.
This dissertation advances this theory by presenting a practical model to promote
development among women in rural Afghanistan. It chronicles how, for the past few decades,
USE OF MOBILE TECHNOLOGY 15
development theories in general and women’s development in particular have lead to human
development theories, and explains how social networks and social capital are ingrained in the
everyday lives of people, and thus can be harnessed to facilitate this new way of doing
development. The project further explores a business plan for this model of development,
relying on the premises of peer-2-peer philanthropy, e-commerce, and mobile phone technology.
Chapter Two will discuss the evolution of development theory—from the neoliberal
emphasis on growth and reliance on natural market forces, as advocated in the “Washington
Consensus,” to human development theory with human capabilities and human basic needs as its
foundation. Chapter Three will further discuss human development theory in terms of human
capabilities and human agency under the premise of human rights. This chapter suggests that the
use of mobile phone technology and mobile phone applications has the potential to create a sea
change in development, as such technology offers the most promising outlook for development
among the global poor and illiterate population. Chapter Four will explore women’s
development issues in developing countries from the perspective of human development, while
tracing a correlation among women, poverty, and gender inequality. Chapter Five will examine
the roles of social networks and social capital in women’s development in developing counties.
This chapter will present evidence suggesting that social networks and social capital can be
harnessed to advance women’s development. Finally, Chapter Six will explore current trends in
development through the use of mobile technology and mobile applications around the world.
This project seeks to promote mobile phone use as the next major development shift to enlarge
women’s capabilities and advance their well being around the world. This chapter will examine
our case study: the use and growth of mobile technology in Afghanistan, and among its female
populations in particular.
USE OF MOBILE TECHNOLOGY 16
Chapter Seven presents a new model of peer-2-peer philanthropy through the use of
mobile phone technology, mobile applications, and e-commerce platforms as a business model to
promote women’s development in remote areas of Afghanistan. Finally, Chapter Eight will
summarize the theory that development enshrined in human capabilities can best be achieved
through the advancement in mobile broadband and high-speed access to Internet and data
services, while suggesting that mobile phone technology, along with mobile applications, can
bring about a paradigm shift in development.
USE OF MOBILE TECHNOLOGY 17
CHAPTER TWO:
DEVELOPMENT STRATEGIES FROM “WASHINGTON CONSENSUS” AND BEYOND
What was initially set forth as a list of principle economic reforms for Latin America and
Sub-Saharan African countries by John Williamson, became the foundation for economic
development in the years since the 1980s. Entrenched in the neoliberal economic philosophy of
free trade and reliance on natural market forces, the “Washington Consensus” came to dominate
global development policies throughout for decades.
Since the worldwide economic meltdown of 2008, a general consensus among scholars in
development has been that the “Washington Consensus” stemmed from an economic philosophy
that, if not the outright cause, contributed a great deal to the crash that virtually brought the
world to the verge of economic calamity. The neoliberal philosophy of free trade, free capital
markets, and limited government intervention while relying on natural market forces (in the
“Washington Consensus”) did not produce the desired results of development. But what has
since metastasized—specifically in the development paradigm—is a hodge-podge of opinions,
ranging from “feel good ones” (such as “human economics,” to a “limited” free market
approach) to broader themes of a New Global Economic World Order (focusing on social class,
sustainability, and basic human needs).
As the development community searched for answers to the failed policies of the
“Washington Consensus,” the World Bank was advocating an important shift of direction in
development in an extraordinary document entitled “Economic Growth in the 1990s: Learning
from a Decade of Reform” (Zagha & Nankani, 2005), which advocated a new approach to
development with its emphasis on humility, policy diversity, selective and modest reforms, and
experimentation (Rodrik, 2006).
USE OF MOBILE TECHNOLOGY 18
Some development scholars believe that the solution to development policy confusion
comes only from extensive institutional reforms, whereas others, like Jeffery Sachs, put faith in
expanding foreign aid, as promoted by the UN Millennium Report. But the most ground-
breaking proposal to replace the “Washington Consensus” may have come from the shifting
stance of the World Bank, as put forth by Stiglitz (1998), whereby social capital becomes the
organizing concept behind development. According to Fine (1999):
The proposal for a post-Washington Consensus from Stiglitz has social capital as its
exact social and political counterpart. It builds up from the micro to the macro from
notions of civil, as opposed to market imperfections and with the potential for non-market
improvements with impact upon the market. (p. 10)
This chapter explores a theory of development that emphasizes individual development
through the democratization of economics, shifting from growth-oriented to human development
standards. It will review the development paradigm since World War II, up through the
“Washington Consensus,” to clarify the historical pathway to this theory.
Growth-Oriented Development
Although the emphasis on the economic development has always been explained as a
conduit to human progress, actual economic development has been far removed from such
idealistic notions. Economic development is grounded in growth, by and large, whereby the
increased capacity of goods and services for the greatest number of population is optimized to
create wealth. This mode of production-of-wealth drives our thinking, steering us away from
either making sure that the weakest among us thrives or expressing our concerns for an
environment to be sustained for future generations. Stoesz, Guzzetta, and Lusk (1999), citing
Hettne (1995), have explained that this was “a school of thought based on the ideal of
‘progress’—that nations and civilizations grow in positive and desirable direction and that this
growth is directional, organic, purposive, irreversible, and cumulative” (p. 104). But, for much of
USE OF MOBILE TECHNOLOGY 19
the 20th century for the majority of the populations around the world, this promise of economic
prosperity has not materialized. This reality leaves us with a question, why, given the great
amount of wealth that developed countries have produced in the past century or so, has the
misery of poverty not been alleviated among an extraordinarily large number of people in less
developed countries?
From the onset of the development of modern economics, the prevailing theory has been
based on Adam Smith’s school of thought, which describes a system that is empirically grounded
on the relationship among labor, capital, resources and markets (Stoesz et al.,1999). Stoesz et al.
(1999) have explained, “There was a fundamental preoccupation with how nations accumulate
wealth, how [wealth] is distributed, and what factors account for the differences between
nations” (p. 105). They have also claimed that Adam Smith’s preamble includes such variables
as human capital (skill, dexterity, and judgment), population, employment, and natural resources:
“The classical model emphasized the efficient allocation of labor and resources, production of
wealth, and growth of output to thereby generate self-sufficiency, increase commerce, and
improve general welfare” (p.105). Moreover, Stoesz et al. (1999) have asserted:
At its simplest level, the paradigm assumes perfect information, lightly regulated or
“free” markets, minimal state involvement, and the economic rationality of those
involved: That is to say, people will, all things being equal, act in self-interest and seek to
maximize utility by choosing “More over Less,” with the least input and cost. (p. 105)
This notion galvanized the foundation of classical and neoclassical economic theory, which
reduces economic development to a belief that (with modest state oversight or none at all)
markets tend to arrive at equilibrium (both in efficiently allocating resources and creating wealth
and welfare).
This philosophy of an unfettered market dominated the post-WWII economic policies of
developed countries, and their obsession with growth became the norm among economic
USE OF MOBILE TECHNOLOGY 20
theorists. Kiely (2007), in referring to this post-WWII period (from 1940 to the mid-late 1960s)
as the Golden Age of Capitalism, has explained, “The developed capitalist countries experienced
high rates of growth in output and consumption” (p. 47). According to Kiely (2007), high rates
of profit facilitated high rates of capital accumulation, thus advancing the age of mass
consumption. On the development front, this ideal of mass consumption was seen as the ultimate
goal of development and the foundation for social development. Poorer nations were expected to
go through stages of development to reach modernization and enter the age of mass consumption
(Rostow, 1960). Rodrik (2006) has explained:
Life used to be relatively simple for the peddlers of policy advice (in the tropics).
Observing the endless list of policy follies to which poor nations had succumbed, any
well-trained and well-intentioned economist could feel justified in uttering the obvious
truth of the profession: get your macro balances in order, take the state out of business,
give markets free rein. “Stabilize, privatize, and liberalize” became the mantra of a
generation of technocrats who cut their teeth in the developing world and of the political
leaders they counseled. (p. 973)
In this environment of laissez-faire economics, John Williamson, in mid 1989, prepared a list of
economic reforms that he casually dubbed the “Washington Consensus.”
The “Washington Consensus”
Originally intended to be a list of principle economic reforms (for Latin America and
Sub-Saharan African countries), Williamsons’s “Washington Consensus” became the foundation
for economic development (since the 1980s, up to the 2000s). With the fall of the Berlin Wall
and the collapse of the Soviet Union, the dominant economic theory—presented in the
“Washington Consensus”—preached a bold leap toward free markets by instituting privatization,
deregulation, and trade liberalization, thus paving the way for international capital flow and
financial liberalization. In a rush to conform to the reality of opening up to international capital
USE OF MOBILE TECHNOLOGY 21
flow, many developing countries were forced to adopt economic policies of neoliberalism and
market fundamentalism.
The blueprint to Williamsons’s (1993) “Washington Consensus” was a list of 10
economic policy recommendations, including (a) fiscal discipline, requiring budget deficits to be
small enough to be financed without recourse to the inflation tax; (b) public expenditure
priorities, redirecting expenditures to high economic returns; (c) tax reform, broadening the tax
base and cutting marginal tax rates; (d) financial liberalization, where the market determines
interest rates, (e) exchange rate, unifying exchange rates globally; (f) trade liberalization,
focusing on eliminating quantitative trade restrictions and lowering tariffs; (g) foreign direct
investment, dismantling the barriers impeding the entry of foreign firms; (h) the privatization of
state enterprises; (i) deregulation; and (j) property rights.
As a development policy roadmap for reforms, the “Washington Consensus,” for the
most part, has been discredited. As Rodrik (2006) has claimed, “The one thing that is generally
agreed on about the consequences of these reforms is that things have not quite worked out the
way they were intended” (p. 974). After the market crash of 2008, the outcome became painfully
obvious. Williamson (1993) acknowledged that his reform lists reflected the economic trends of
the decades prior to his policy recommendation, which were entrenched in neoclassical
economics. Williamson (1993) further admitted that “Washington Consensus” leaves a major
argument of economic policy open to interpretation, notably the trade-off between efficiency and
equity. This trade-off of efficiency with equity provokes the most stinging rebuke of the reforms
put forth by Joe Stiglitz (the World Bank’s former Senior Vice-President and Head of Economic
Research).
USE OF MOBILE TECHNOLOGY 22
Stiglitz (1998) argued that most development policies, including the “Washington
Consensus,” focus narrowly on economics, which confuses not only means with ends, but also
cause with effects. As Stiglitz (1998) explained:
The consensus all too often confused means with ends: it took privatization and trade
liberalization as ends in themselves, rather than as means to more sustainable, equitable
and democratic growth. I talked there about many of the ways in which the “Washington
Consensus” had gone astray. It focused too much on price stability, rather than growth
and the stability of output. It failed to recognize that strengthening of financial
institutions is every bit as important, to economic stability, as controlling budget deficits
and increasing the money supply. (p. 1)
Stiglitz (1998) posited that development policies are caught in the struggle between the
ideologies of left versus right. Economists on the left tend to attribute the underlying problem to
market failures, whereas economists on the right see government as the problem (insisting that if
it would only step out of the way, markets would provide the efficient resource allocation).
Stiglitz (1998) claimed that the fundamental failure of the “Washington Consensus” lies in its
assumption that competition is far more important than private property, whereas most
economists believe that equilibrium is required between the two, and that lacking equilibrium
creates a trade-off between equity and efficiency. Williamson (1993) further explained:
My view is in fact that the “Washington Consensus” is the outcome of worldwide
intellectual trends to which Latin America contributed and which have had their most
dramatic manifestation in Eastern Europe. It got its name simply because I tried to ask
myself what was the conventional wisdom of the day among the economically influential
bits of Washington, meaning the U.S. government and the international financial
institutions. (p.1329)
Williamson (2000) has further disputed the notion that the “Washington Consensus” was an
economic blueprint synonymous with neoliberalism, describing it as an explanation of the
dominant economic policies of the time:
On the contrary, I thought of the “Washington Consensus” as the lowest common
denominator of policy advice, being addressed by the Washington institutions to Latin
American countries as of 1989, a year when the market fundamentalism of Reagan’s first
USE OF MOBILE TECHNOLOGY 23
term had already been superseded by the return of rational economic policymaking, and it
was pretty clear which of the ideas of the Reagan years were going to survive and which
were not (monetary discipline but not monetarism, tax reform but not tax-slashing,
liberalization of trade and FDI but maybe not complete freedom of capital movements,
deregulation of entry and exit but not casual attitude to prudential supervision (of
financial institutions or the suppression of regulations designed to protect the
environment). (p. 5)
Williamson (2000) angrily disputed perceptions of the “Washington Consensus,” explaining:
Can one explain how a term that was invented to summarize the lowest common
denominator of policy advice that survived the demise of Reaganomics came to be used
to mean the most extreme version of Reaganomics, a set of doctrines that may have
temporarily conquered many of the commanding heights of Washington in the early
1980s but that neither the Fed nor the Bank ever endorsed, which makes it pretty difficult
to argue that it ever commanded a consensus? (p.5)
Social Capital
Stiglitz (1998) presented a new paradigm of development that focused on the
transformation of society as the ultimate objective of development. Stiglitz (1998) has explained,
“This vision needs to include a view of transformation on institutions, and the creation of new
social capital and capacities, in some cases to replace traditional institutions that will inevitably
be weakened in the process of development” (p.16). According to Ben Fine (1999), this new
agenda of development is based on a “new Keynesianism,” replacing state versus market
dichotomy to social capital as the foundation of development. Fine (1999) has argued, “Faced
with imperfect information, individuals can decide to create or engage in socially structured
activity both within and between market and non-market forms of organization” (p. 4). He cited
the rapid change evolving within and around the thinking of major banking institutions, where
the notion of “social capital” has readily become the lexicon of development. Fine (1999)
explained that social capital can come in many forms (including public goods, networks and
culture), but “The only proviso is that social capital should be attached to the economy in a
functionally positive way for economic performance, especially growth” (p. 5). According to
USE OF MOBILE TECHNOLOGY 24
Fine (1999), Stiglitz’s post–“Washington Consensus” has social capital as its social and political
counterpart. Stiglitz (1997), in a paper following his appointment at the World Bank, wrote:
Today, we recognize that development is more than the accretion of physical capital and
even more than the accretion of human capital. It includes closing the knowledge gap
between rich and poor economies. And it includes other transformations, such as those
that result in lower population growth rates and changes in economic organization. (p.19)
Putnam (1993) regarded the role of social capital in development in a more precise way,
explaining:
Social capital is not a substitute for effective public policy but rather a prerequisite for it
and, in part, a consequence of it. Social capital […] works through and within states and
market, not in place of them [….] The social capital approach promises to uncover new
ways of combining social infrastructure with public policies that work and, in turn, of
using wise public policies. (p. 42)
Fine (1999) goes further, claiming that social capital is how the noneconomic, nonmarket can
make the economy work, through the values of custom, trust, culture, networks, and so on.
Woolcock (1998) has regarded social capital as a unifying force between cross-academic
disciplines, suggesting:
In social capital, historians, political scientists, anthropologists, economists, sociologists,
and policy makers […] may once again be able to find a common language [….] Social
capital provides sociologists, in particular, with a fruitful conceptual and policy device by
which to get beyond exhausted modernization and world-systems theories. (p.188)
Shifting Away from the “Washington Consensuses”
As the “Washington Consensus” proved to be disastrous as an economic policy, the
development policy community sought alternatives to replace this agenda. Whereas some
development scholars—like Stoesz et al. (1999)— advocated institutional reforms, a landmark
report by the World Bank, entitled “The World Bank’s Economic Growth in the 1990’s:
Learning from a Decade of Reform (2005),” was promoting a total shift away from the neoliberal
USE OF MOBILE TECHNOLOGY 25
economic-based solutions toward emphasizing humility, policy diversity, selective and modest
reforms, and experimentation (Rodrik, 2006).
According to Rodrik (2006), at the heart of the new thinking in the World Bank report
was an admission that development policy does not abide by a single universal set of rules, and
that it was time to move away from “formulae and the search for elusive ‘best practices’” (p.
974). The World Bank report argued that no correlation exists between policy reform and
economic growth. According to Rodrik (2006), the report rebuked the conventional “Washington
Consensus” package, arguing that: (a) The emphasis on efficiency gains in conventional policy
in economic reform was misguided and did not pay attention to other forces such as market
failure; (b) Objectives such as market-oriented incentives, macroeconomic stability, and outcome
orientation do not translate to set of policy actions; and (c) Development cannot be bound to one
universal solution offered in different contexts. Rodrik (2006) expressed the belief that the
document offers a radical rethinking of development strategies.
At about the same time that the World Bank’s report came out, the International
Monetary Fund (IMF) (Anoop Singh et al., 2006) published a report analyzing the policy
recommendations of the “Washington Consensus.” The IMF report presented a radically
different argument than the one by the World Bank, not only endorsing some of the “Washington
Consensus” policy recommendations, but also arguing that these reforms did not go deep enough
or far enough (Rodrik, 2006). The IMF report (2006) actually claimed that some progress was
already made, but institutional reforms “were uneven and remained incomplete” (p.14). The
report explained that there was a lack of emphasis on institutional reforms, recommending that
more institutional reforms take place to ensure the success of policies presented in the
“Washington Consensus.” However, Rodrik (2006) disputed such a claim:
USE OF MOBILE TECHNOLOGY 26
The lack of emphasis on institutional reform is itself an implicit repudiation of the
original version of “Washington Consensus,” insofar as the latter did not feature
institutional reform of the type that Krueger and the IMF have in mind in their
interpretation of the 1990s. Most of the items in Williamson’s original list were relatively
simple policy changes (liberalize trade, eliminate currency overvaluation, reduce fiscal
deficit, and so on) that did not require deep-seated institutional changes. (p. 979)
Rodrik (2006) further claimed:
Taken to its logical conclusion, the focus on institutions has potentially debilitating side
effects for policy reformers. Institutions are, by their very nature, deeply embedded in
society. If growth indeed requires major institutional transformation—how can we not be
pessimistic about the prospects for growth in poor countries? (p. 979)
Furthermore, there is not a clear and distinct institutional design feature that we could point to as
the causal link to economic growth (Rodrik, 2006). But this reality doesn’t stop other scholars
from promoting institutional reforms as the foundation to a new development strategy. Stoesz et
al. (1999) made this argument in terms of “state failure,” advocating institutional reforms in
policies and bureaucracies. Among the reforms they suggested were “downsizing the public
sector, deregulation of the marketplace, balancing national budgets, bureaucratic reform and
reorientation, privatization of state-owned enterprises, elimination of tariffs, and improved
accountability in political decision making” (p.113).
Development strategies and models promoted after the “Washington Consensus”—and
especially following the economic meltdown of 2008—have taken a sharp turn in admitting that
neoclassical economic solutions to development have run their course. The reality has shifted to
embrace a greater role for governments in initiating and executing development policies,
especially when it comes to addressing human conditions. As rampant poverty and health
problems persist in desperate human conditions throughout poor countries, greater demands have
been made of developed countries to ante up their support to provide resources and increase their
commitment to foreign aid for struggling governments.
USE OF MOBILE TECHNOLOGY 27
“Millennium Development Goals,” 2005
In 2005, the United Nation commissioned a report titled “Millennium Development
Goals,” which advocated cutting poverty by half, achieving universal primary education,
advancing gender equality, reducing child mortality by two-thirds, reducing the spread of
Malaria and HIV/AIDS, and securing environmental sustainability—all by 2015. What is
different about this report is that it advocated a much greater commitment from the advanced
industrial nations to achieving the aforementioned goals. The United Nations recruited Jeffery
Sachs, renowned development economist, to spearhead the project. According to Kukreja (2001),
Sachs was uniquely qualified to promote such development strategies, especially as he had
advocated “for greater investment and financial assistance in critical rural sectors of poorer
regions and in sub Saharan countries.” Sachs was known to have been a vocal critic of the
market model of development. As Kukreja (2001) has explained: “A critical part to
understanding Sachs’s advocacy of the Millennium Development Goals is to appreciate his
critique of past strategies—such as the conditional structural adjustment programs pursued by the
IMF” (p. 327). In a landmark theory, Sachs (2006) explained,
In the past quarter century, when impoverished countries have pleaded with the rich
world for help, they have been sent to the world’s money doctor, the IMF. The main IMF
prescription has been budgetary belt tightening for patients much too poor to own belts.
(p. 75)
Kukreja (2007) asserted,
For Sachs, in lieu of the failed “one size fits all” approach typical of the “Washington
Consensus” and reflected in the actions of the IMF and other such bodies, experts need to
emulate the “clinical” approach to development as practiced in medicine. Not unlike
individuals, economies are “complex systems,” and hence “differential diagnosis” is
essential to differentiate ailments or illnesses even when some common symptoms may
be present among two or more cases. (p. 328)
USE OF MOBILE TECHNOLOGY 28
Sachs (2006) suggested that the Millennium Development Goals should replace the past 20 years
of development known as the “structural adjustment era,” claiming, “This era, ushered in by the
conservative turn in the United States under President Ronald Reagan, and in the United
Kingdom under Prime Minister Margaret Thatcher, was based on simplistic, even simpleminded,
view of the challenge of poverty” (p. 81). As Sachs (2006) has advocated undertaking a massive
infusion of resources into development strategies on a broader scale, many scholars in the
development field have promoted a basic-needs approach as a counterpoint to classical and
neoclassical growth strategies.
Basic-Needs Approach to Development
The basic-needs approach concentrates on human development by meeting the basic
needs of the poorest populations around the world. Its objective is to improve human welfare in
economics, health, education, and human rights. The major argument put forth by the scholars in
this field is that investment in the living standards of the poor improves the quality of people’s
lives, thus increasing aggregate demand and, ultimately, economic growth. It contends that
economic growth is at the heart of neoclassical economic policies and is insufficient in assuring
human development. In other words, basic-needs may rely on economic expansion but some
redistribution mechanism may direct the benefits of growth more equitably (Stoesz et al., 1999).
In the years since the “Washington Consensus” and up to the market crash of 2008, neoliberal
development policy made some references to human welfare. As Stoesz et al. (1999) explained:
To some degree, it was assumed that aggregate growth would entail a net gain for all
sectors of the population because, as a society becomes richer, demand is increased, and
unemployment tends to decline. The “trickle down” of wealth would tend to improve
welfare indicators. (p. 117)
USE OF MOBILE TECHNOLOGY 29
But as the poor became even more marginalized—as a result of the structural adjustment
program of the “Washington Consensus”—many other scholars looked at a more “inclusive
economy” (Craig & Porter, 2003) that made a greater investment in human capital.
In a comprehensive review of the World Bank Poverty Reduction Strategy Papers
(PRSPs) (adopted in 1999), Craig and Porter (2003) described the papers’ proposals as a hybrid
version of development strategy that embraces a neoliberal approach, while making greater
allowances for the basic-needs approach to deal with the issue of poverty around the world.
Craig and Porter (2003) explained that PRSPs are part of a post– “Washington Consensus”
re-morphing of neo-liberal approaches, in which governments and agencies of various
stripes in both OECD and developing countries are renewing focus on linkages between
the poor, their capabilities, and market opportunities; between local and central
governance, between “social cohesion” (or “social capability”) and “well-being.” (p. 2)
They coined this new convergence the “Inclusive Economy.” In general, as Craig and Porter
(2003) put it, the convergence describes the merger of a country’s macroeconomy and its social
policies to promote broad-based growth while measuring how broad-base growth reduces
poverty.
According to Craig and Porter (2003), this development theory is based on neoliberal
economics but includes a number of additional steps to broaden the effect in reducing poverty
and advancing human well-being; the four steps include the following: (a) “broad based growth,
more recently rendered as ‘pro-poor’ growth, focusing on ‘employment creating growth’”; (b)
“Investments in human capital, typically in the health and education sectors”; (c) “Good
governance, which has grown from anti-corruption and implementation of public accountability,
measures to embrace macro-economic fiscal management and decentralized governance.” (d)
“The fourth element includes special purpose financing arrangements, sometimes called ‘social
safety nets,’ for those adversely affected by the adjustment process and/or unable to participate
USE OF MOBILE TECHNOLOGY 30
in the growth” (p. 53). However, many scholars (including Craig and Porter [2003]) believe that
PRSP’s flaw lies in the narrow neo-liberal economic policies that have proven unacceptable in
the face of growing empirical evidence—especially after the market crash of 2008. As such,
recent scholars have completely discredited neo-liberal economics in development while moving
away from state solutions. A new breed of scholars, such as Hart, Laville, and Cattani (2010),
has proposed a new economic model, emphasizing human beings in a collective way in a world
society; as they put it, “It is time for the people to have their say in economic matters” (Hart et
al., 2010, p. 1)
Human-Centric Development
In the past two decades, France, Brazil and other Latin America countries, and
Scandinavia have been practicing a “Human Centric” economic theory that Hart et al. (2010)
dubbed “The Human Economy,” which, they explained, “refers to an emphasis both on 1) what
people do for themselves and 2) on the need to find ways, forward, that must involve all of
humanity somehow” (p. 1). This theory, according to these scholars, integrates private and public
interests, forming a “new human universal.” According to Hart et al. (2010), to be “the human
economy,” the economy must demonstrate the following characteristics:
1. It is made and re-made by people; economics should be of practical use to us all in
our daily lives.
2. It should address a great variety of particular situations in all of their institutional
complexity.
3. It must be based on a more holistic conception, taking into consideration everyone’s
needs and interests.
4. It has to address humanity as a whole and the entire world society.
USE OF MOBILE TECHNOLOGY 31
These scholars propose a “new institutional economics” formed out of anthropology, sociology,
political economy, economic philosophy, and world history, that requires social solidarity and
draws on the voluntary reciprocity between association and people committed and working for
renewal of society. It will merge “self” and “society.” The objective of this new strategy is the
formation of an economy that safeguards human life and preserves everything on this planet that
sustains life. That means it is an inclusive economy, based on a common good—and not on a
preoccupation with material and wealth—democratizing the economy and having noneconomic
ends (Hart et al., 2010).
As the “Washington Consensus” proved to be a disastrous development theory, the
lessons learned from it suggest that there is no one perfect solution to many development issues.
The neo-liberal approach to a free market—with its mantra of “stabilizing,” “privatizing,” and
“liberalizing” to achieve economic growth— with its “trickle down” theory (to human
development) has not worked. The impoverished masses around the world still stand at a
staggering number. Many scholars in the field of development have concluded that any
development theory must focus on human development with social capital, sustainability, and
basic human needs as the foundation for worldwide growth and social improvement. The next
chapter will build on this theory of human development by focusing on human capabilities and
human rights.
USE OF MOBILE TECHNOLOGY 32
CHAPTER THREE:
HUMAN DEVELOPMENT, HUMAN RIGHTS, AND HUMAN CAPABILITIES
In the 1990s, when the United Nations Development Programme published the Human
Development reports (1990, 1993, 1995, 1996, 2000), the premises were designed to assess the
quality of life in developing nations by using the concept of human capabilities—men’s and
women’s abilities to do and be certain things deemed valuable. These reports indicated a move
away from the neoliberal approach to development based on broader economic performances,
toward maximizing human well being as an optimum objective in public policy. These reports
were based on capabilities and functions with strong conceptual foundations grounded in
freedom, participation, and human rights. These reports used a measurement tool that evaluated
nations’ progress in human development, including the capabilities of a nation’s citizens to
survive, be healthy, be knowledgeable, and have a decent standard of living. The emphasis on
capabilities, freedom, and human rights offers the most significant change in theoretical
strategies of development, shifting the focus from a rigid orthodoxy in which national income
counts in development policy to a more flexible policy of people-centered awareness based on
human agency.
This chapter discusses human development theory, explaining how one of its most
important elements is its application of Sen’s theory of rights to human capabilities and
functioning, and how Sen explains his approach to enlarging the range of things that a person
could do and be in his or her life (Sen, 1989). The chapter will evaluate this capability concept of
development with regard to expanding the range of things a person can be and do as a
fundamental human freedom, human right, and social justice. It will then discuss the
measurement tools put forth by Sen and incorporated into United Nations’s reports, called the
USE OF MOBILE TECHNOLOGY 33
Human Development Index (HDI), to evaluate achievement in the human development
approach.
Human Development Approach in Development Policy
The development policy’s human development assesses by how well certain policies
expand the capabilities of all people. In a shift of development policy in the 1990s, the United
Nations Development Programme published a series of annual reports that moved the
development policy discussions from a neoliberal foundation (the “Washington Consensus”) to a
new human development paradigm. These reports used Sen’s capability approach—based on the
concept of well-being—to define public policy in the areas of poverty reduction, sustainable
development, gender inequality, governance, and globalization (Fukuda-Parr, 2003), while
placing greater emphasis on an agency aspect of development.
Mahbub Ul Haq (1990), author of the first report, suggested that the reports were
designed to move the focus of development policies from measurements of national income to
people-centered policies. These people-centered policies were based on Sen’s work on
capabilities and functionings that defines human development as the process of enlarging the
range of things a person can do and be in his or her life (Sen, 1989). As Fukuda-Parr (2003)
explained:
Sen’s theory of development, as an expansion of capabilities, is the starting point for the
human development approach: the idea that the purpose of development is to improve
human lives by expanding the range of things that a person can be and do, such as to be
healthy and well nourished, to be knowledgeable, and to participate more fully in
community life. Seen from this view point, development is about removing the obstacles
to what a person can do in life, obstacles such as illiteracy, ill health, lack of access to
resources, or lack of civil and political freedom. (p. 303)
Fukuda-Parr (2003) further explained that the philosophical underpinnings of human
development approach, put forth by Sen, differs from those embodied in neoliberalism and the
USE OF MOBILE TECHNOLOGY 34
basic needs approaches. Fukuda-Parra (2003) suggested that although all three approaches to
development try to achieve the ultimate goal of advancing human well-being, they all define
well-being differently. For example, neoliberalism defines well-being through the utility
maximization of an individual, whereas the basic needs approach defines well-being through the
availability of services and commodities to meet an individual’s basic needs. In human
development approach, the strongest pillars come from advocating the well-being of individuals
in terms of rights, freedom, and human agency, all of which are conspicuously missing from the
neoliberal approach.
The neoliberal approach presents its concerns in terms of institutional efficiency in the
provision of public services, as had dominated the debates on “good governance” in the
“Washington Consensus” era. Fukuda-Parr (2003) has suggested, “The human development
approach is concerned with governance of social justice, a governance that enlarges the
participation, power, and influence of people, especially those who are disadvantaged, such as
women, ethnic minorities, and the poor” (p. 308).
The central themes of Sen’s human development approach are based on the human
“evaluating aspect” and “agency aspect.” According to Fukuda-Parr (2003):
The first is concerned with evaluating improvements in human lives as an explicit
development objective, and with using human achievements as key indicators of
progress. This contrasts with paradigms that focus on economic performance. The
second is concerned with what human beings can do in order to achieve such
improvements, particularly through policy and political changes. (p. 303)
The agency aspect of the human development approach suggests that humans are active agents of
change themselves and not merely the beneficiaries of social and economic advancement. It
advocates the idea that investing in human capabilities—such as improving their education and
health—ultimately reflects the overall social and economic progress of all societies. To achieve
USE OF MOBILE TECHNOLOGY 35
these goals of investing in human capabilities, we must explore the notion that such investment
requirements fit well with Sen’s application of human rights in human development approach to
development itself.
Human Rights and Development
“Human Rights” is a concept that has seen dramatic growth in the past few decades
(Cmiel, 2004). There is something fundamental about the idea that a person anywhere in the
world—irrespective of citizenship or territorial legislation—as Sen (2004) has put it, “has some
basic rights, which others should respect” (p. 315). Prior to the 1940s, the term was hardly ever
used, and no official organizations or nongovernmental agencies (NGOs) such as the
International Commission of Jurists, Amnesty International, or Human Rights Watch, even
existed. The ideal became more concrete with the passage of the Universal Declaration of
Human Rights by the United Nation Assembly in 1948, and especially after the 1990’s human
rights movement came to encompass many moral appeals. According to Cmiel (2004), “The
international human rights community today conventionally distinguishes between “civil and
political rights” (as one grouping) and “economic, social, and cultural rights” (as another)” (p.
122).
The economic and social aspect of human rights offers the most challenging theoretical
argument between entitlement and duties. As Cmiel (2004) has explained, not surprisingly, both
tendencies provoke a universal divide, and even Mohandas Gandhi chose to distance himself
from the 1940s Human Rights Campaign, expressing preference for the side of duty.
Haakonssen (1996) was one of the first scholars to explain the gradual shift from duties to rights
that started in 17th- and 18th-century ethics.
USE OF MOBILE TECHNOLOGY 36
In 1776, the US Declaration of Independence insisted that these rights are “self evident,”
that everyone is “endowed by their Creator with certain inalienable rights.” However, as Cmiel
(2004) has explained:
According to Haakonssen, American Revolutionary rhetoric was dominated by the
European tradition that viewed natural rights as flowing out of natural law. There was a
natural order to the world, and duties were more important than rights. Rights did exist,
even inalienable rights, but they were “logically subordinate [to duty].” (p. 120)
Zuckert (2002) has dismissed the idea that “right was driven from duty” in natural law. And, in
Anarchical Fallacies, Jeremy Bentham (1972), philosopher of modern utilitarianism, utterly
dismisses man’s claims to any natural rights, pronouncing, “Natural right is simple nonsense:
natural and imprescriptible rights, rhetorical nonsense, nonsense upon stilt.” (p. 501)
In explaining his theory of human rights and capabilities, Sen (2005) bridges the gap
between entitlement and duty by expressing the entitlement-to-capabilities in terms of certain
human freedoms. Sen (2005) explained:
It is possible to argue that human rights are best seen as rights to certain specific
freedoms, and that the correlate obligation, to consider the associated duties, must also be
centered on what others can do to safeguard and expand these freedoms. (p. 152)
That capabilities under the confine of human rights can be seen—broadly—as freedoms of
particular kinds would seem to establish a basic connection between the two categories of ideas.
On this subject, Nussbaum (1997) has explained, “If A has a right to S, then it would appear there
must be someone who has a duty to provide S to A” (p. 273). Nussbaum explained that a
different language of human capabilities and human functioning has been embraced in basic
human entitlement, which paves the way to developing policies that can be legitimate on face
value alone with a foundation on the basis of human rights. In other words, the policy can be
crafted to a specific basic need, such as providing basic nutrition to humans, solely because
human rights would dictate such edicts. Nussbaum (1997) further explained:
USE OF MOBILE TECHNOLOGY 37
Since 1993, the Human Development Reports of the United Nations Development
Programme (UNDP) have assessed the quality of life in the nations of the world using the
concept of people’s capabilities, or their abilities to do and to be certain things deemed
valuable. Under the influence of economist/philosopher Amartya Sen, they have chosen
that conceptual framework as basic to inter-country comparison and the articulation of
goals for public policy. (p. 275)
Although the international covenants (on civil and political rights and on economic, social and
cultural rights) are based on self-determination, the civil and political aspects of these rights
garner the most activism.
The concept of economic rights, in the confines of these covenants, generates less
activism and more theoretical “food fights” between opposing economic theories. The Nigerian
activist Mbonu Ojike (1946) once claimed that the right to rule one’s self is a natural right that
crystallizes the natural right to one’s capabilities as the natural right to rule one’s self. Since the
1980s, human rights activism has broadened to some extent to include health rights, women’s
rights, and economic justice, but there has always been resistance to including such basic rights
in broader human rights advocacy. Sen (2004) has explained:
The dismissal of human rights is often comprehensive and is aimed against any belief in
the existence of rights that people can have unconditionally, simply by virtue of their
humanity (rather than having them contingently, on the basis of specific qualifications,
such as citizenship or legal entitlements). (p. 316)
Some critics, however, propose a discriminating rejection: they accept the general idea of human
rights but exclude from any acceptable list specific classes of proposed rights (in particular, so-
called economic and social rights, or welfare rights) (Sen, 2004). Rights that express humans’
entitlement to certain basic economic provisions and well-being move the development agenda
away from the kind of utilitarian-based ethics preached by Bentham and infused in development
theory as manifested in the “Washington Consensus” (Williamson, 1993).
USE OF MOBILE TECHNOLOGY 38
In terms of broader policy implications, the objective behind introducing human rights
into human development is to shift the focus from economic development (as indicated by
national income and GNP) to human-centered policies. Indeed, as Jolly (2003) has explained:
[The] Human Development (HD) approach embodies a robust paradigm which may be
contrasted with the neoliberal paradigm of the “Washington Consensus” There are points
of overlap, but important points of difference in objectives, assumptions, constraints and
in the main areas for policy and in the indicators for assessing results. (p. 83)
Neoliberalism’s definition of human well-being stems from the notion of utility maximization,
whereas Sen expresses the limitation of this approach in its tendency to neglect rights, freedoms,
and human agency (Fukuda-Parr, 2003).
The over-arching problem is that utilitarianism tends to think of total in the concept of
average, an aggregate that fails to acknowledge an individual’s quality of life. However, Rawls’s
(1957) theory of justice evinces that utilitarianism can tolerate results that total well-being on the
average skill is good enough, even though some individuals may suffer.
Sen’s (2004) theory is important because economic growth becomes only a means and
not an end in itself as it has been presented in many developmental theories, such as those
advocated under the “Washington Consensus.” Fukuda-Parr (2003) explained, “The concern
with the well-being of all people emphasizes equity as a major policy objective, requiring
monitoring not only through nation’s averages, but also via measures of deprivation and
distribution” (p. 305). Here, the measurement tools for development center around human
development based on indicators of human well-being as defined through universal human rights
charters.
How Sen (2005) arrives at equating human development to human right is explained as
freedom within the human rights, including capabilities as a certain freedom. As Sen (2005) has
posited:
USE OF MOBILE TECHNOLOGY 39
It is possible to argue that human rights are best seen as rights to a certain specific
freedom, and that (the correlate obligation to consider the associated duties must also be
centered on what others can do to safeguard and expand these freedoms). Since
capabilities can be seen broadly, as freedoms of particular kinds, this would seem to
establish a basic connection between the two categories of ideas. (p. 152)
Sen (2005) explained that freedom is bound to two distinct variables of “opportunity” and
“process,” suggesting that the opportunity aspect of freedom belongs in the same territory as
capabilities. According to Sen (2005), “Since both process and opportunity are the essence of
freedom, therefore capabilities as opportunity can be explained as the freedom covered by human
rights” (p. 153). Sen (2005) further explained:
It is important to recognize that both processes and opportunities can figure powerfully in
the content of human rights. A denial of “due process” in being, say, sentenced without a
proper trail can be an infringement of human rights (no matter what the outcome of the
fair trail might be), and so can be the denial of opportunity of medical treatment, or the
opportunity of living without the danger of being assaulted (going beyond the exact
process through which these opportunities are made real). The idea of “capability” (i.e.
the opportunity to achieve valuable combinations of human functioning—what a person
is able to do or be) can be very helpful in understanding the opportunity aspect of
freedom. (p. 153)
Here, Sen (2005) seems to be arguing that the most relevant type of equality is equality of
capability.
Human Well-Being, Human Capabilities
The opportunity aspect of freedom, as a protected value under human rights theories,
helps development theorists argue on a more plausible platform in explaining human
development. Sen (2005) has explained:
[S]eeing opportunity [in] terms of capability allows us to distinguish appropriately
between (i) whether a person is actually able to do things she would value doing, and (ii)
whether she possesses the means of instruments or permissions to pursue what she would
like to do. (p. 153)
USE OF MOBILE TECHNOLOGY 40
Thus, the subject’s actual ability to “do things” may depend on many contingent circumstances.
What Sen (2005) seems to suggest is that opportunity—explained in terms of an individual’s
capability—may broaden some justice theories (e.g., the Rawlsian Difference Principle), while
minimizing the overarching means to these theories especially when it comes to opportunity for
income and primary goods. The opportunity to receive income and primary goods based on
capabilities—identified as “opportunities”—can be effective in steering the conversation toward
true measurements of human development. According to John Rawls (1957), a fundamental idea
of justice is fairness. Rawls’s (1957) principle of “justice as fairness” includes the “fair equality
of opportunity” and “difference principle,” which are concerned with income and wealth.
Rawls’s (1957) second principle holds that a distribution must meet “fair equality of
opportunity” for human development, which Sen (2005) has presented as “capabilities.”
Nussbaum (1997) has referred to a list of “primary goods” put forth by John Rawls
(1957) under the theory of justice (inclusive of capacities of individuals, as well as of income
and wealth). As she explained:
[T]his list is heterogeneous. Some of its items are capacities of persons such as liberties,
opportunities, and powers, and the social basis of self-respect as a complex property of
society’s relation to a person, but income and wealth are pure resources. And income and
wealth frequently play a central role in the measurement of who is better off or worse off.
(p. 284)
Rawls’s (1957) theory identifies a set of basic resources and then questions their distribution as a
measurement of how well even the worst off citizens are doing. Nussbaum (1997) further
attaches human well-being (based on capabilities) to the measurement of how well individuals
are doing. Nussbaum wrote:
I believe that the most illuminating way of thinking about the capabilities approach is that
it is an account of space within which we make comparisons between individuals across
nations as to how well they are doing. This idea is closely linked with the idea of the
USE OF MOBILE TECHNOLOGY 41
theory of justice, since one crucial aim of a theory of justice typically is to promote some
desired [equal] state of people. (p. 279)
To Nussbaum (1997), this comparison of well-being doesn’t mean how satisfied a person is, or
how many resources a person commands, but what a person is actually capable of doing and
becoming. Nussbaum (1997) believes that a variety of human functions are important to human
life and what, individually, a person is capable of. As she has put it:
This focus on capabilities, unlike the focus on GNP, or an aggregate utility, looks at
people one by one, insisting on locating empowerment in this life and in that life, rather
than in the nation as a whole. Unlike the utilitarian focus on satisfactions, it looks not at
what people feel about what they do, but about what they are actually able to do. Nor
does it make any assumptions about the commensurability of the different pursuits. (p.
275)
Nussbaum shifts the focus shifts from resources and their distribution to a concern with what is
going on in one’s life.
While Sen (2005) elucidated human capabilities under the guidance of human rights,
Nussbaum offered a list of human capabilities that can be universally applied to human
development theory. Nussbaum articulated these capabilities as an expanded version of Rawls’s
(1957) list of primary goods as presented in his theory of justice. Nussbaum’s (1997)
capabilities, unlike Rawls’s (1957), are an attempt to move the human development agenda from
a political sphere to a place where, in general, most can agree is a necessary basis for pursuing
good life. Fukuda-Parr (2003) suggested that development as expansion of capabilities can also
entail removing the obstacles to what a person can do in life. These obstacles can be as
pronounced as preventing girls from becoming educated, as practiced in Afghanistan, or the lack
of access to resources or income for women in rural areas. We can also argue that, by providing
tools to individuals to advance their capabilities, we are removing obstacles to the expansion of
their well-being. Rawls (1957) also insisted that we cannot be content with merely equal liberty;
USE OF MOBILE TECHNOLOGY 42
we must pursue its equal worth by eliminating unfavorable economic and social circumstances
that prevent resources from being formally available to all people. The human development
approach breaks these goals down into measurements of well-being, as articulated in the Human
Development Index reports issued by the United Nation Development program.
Human Development Index
In a 1990s Human Development Report through the United Nations Development
Program (UNDP), Mhabub ul Haq (1995) offered a proposal on how to evaluate human
development with human well-being as its objective. The Human Development Index (HDI)
presented in this report was by and large based on Sen’s work on capabilities and functions, with
its strong conceptual foundation based on freedom, participation, and agency. Fukuda-Parr
(2003) suggested that this mindset of development paved the way for creating many
measurement tools for such issues as gender equality—the gender-related development Index
(GDI) and the Gender Empowerment Measure (GEM) in 1995—and the measurement of poverty
among human beings in relation to human development through the Human Poverty Index (HPI),
published in the 1997 Human Development Report.
Two distinct criteria were used to develop the HDI report. The first is a capabilities
approach to the measurement of human development. The second is a focus on national averages
rather than disparities. The most difficult task in putting this report together was the following
question: “Which capabilities do we include as the basis of human development measurements?”
In the final analysis, the report relied on two criteria: (a) They must be of universal value, and (b)
They must be basic. According to Fukuda-Parr (2003), the report deliberately left the choices of
specific capabilities open-ended precisely because such elements may vary over time and place.
Fukuda-Parr (2003) suggested that open-ended capabilities could contrast with other basic needs
USE OF MOBILE TECHNOLOGY 43
capability lists, including some put forth by Nussbaum (1997). The basic and universal values
that made their way in to the HDI report are to be knowledgeable, to survive, and to enjoy a
decent standard of living. Interestingly, equity outcome was not a criteria used in developing this
report. Fukuda-Parr (2003) explained:
Gender disparities were a central feature of the concern with equity, along with other
disparities such as those of class, ethnicity, or rural/urban residence. Some argued that to
combine a distribution measure with an average achievement measure would be like
adding apples and oranges. (p. 303)
Later, the Gender Related Development Index (GDI)—to some extent—adjusted the HDI for
gender disparity. Even though these HDI reports (issued by the United Nations in the 1990s)
were still limited in scope, they offered a shift in development theory, specifically recognizing
the injustice of gender inequality. A passage from the 1995 report indicates, “Human
development is a process of enlarging the choices of all people, not just for one part of society.
Such a process becomes unjust and discriminatory if most women are excluded from its
benefits.”
In Sen’s (2004) human development approach, the goal is not simply to evaluate
improvements in human life but also to clarify what human beings can do to achieve them. He
called this the “agency aspect” of human development, which deals with human beings as
change agents, whereby opportunities extended to them enlarges their capabilities. Here, the
concern moves to investing in the health and education of humans as a means to broader
economic and social progress, a legitimate right of human beings. Fukura-Parr (2003) explained:
The recognition and promotion of human rights, and the legal frameworks that guarantee
these rights, are important in the human development approach, not only for their
intrinsic value, but also for their instrumental value in promoting agency, both individual
and collective. A human right is a claim on society that carries obligations for others to
promote, protect, and respect that right (United Nations Development Programme 2000).
These obligations require the accountability of the ‘duty bearers,’ enforceable by law.
USE OF MOBILE TECHNOLOGY 44
This provides a powerful basis for public policy that can facilitate human agency. (p.
308)
When adding smart technology into this equation, the human agency aspect in the human
development approach may offer the strongest practical application of development policy.
After all, investing in human development enlarges one’s capabilities. Nussbaum (1997),
referring to what she calls “combined capabilities” (p. 290), has recommended advancing human
capabilities and creating the environment to expand upon these capabilities. In this scenario, a
person will be able to fully exercise her capabilities to do what she is capable of doing or being
when the environment is conducive—and even constructive—to promoting such capabilities. As
Nussbaum (1997) explained, “This idea means promoting the [developmental] states of the
person by providing the necessary education and care, as well as preparing the environment so
that it is favorable for the exercise of practical reason and the other major functions” (p. 290). In
the human development approach, individuals’ capabilities foster collective public participation
in social action, thus promoting issues relevant to human well-being (Fukura-Parr, 2003).
The next chapter focuses on women’s progress in developing countries, making the case
that women’s development can best be advanced under the human capabilities approach in
development theory. It explores the practical implications of human development theory in terms
of expanding capabilities and creating environments conducive to advancing these capabilities
through mobile phone technology and mobile-based applications.
USE OF MOBILE TECHNOLOGY 45
CHAPTER FOUR:
WOMEN’S DEVELOPMENT IN DEVELOPING COUNTRIES
This chapter addresses women in developing countries under the broader concept of
human development. It examines the relationship between education and empowering women in
poverty alleviation and, more specifically, explores the role of microfinancing and other forms of
extending credit to women in developing countries in order to improve women’s economic
conditions. This chapter also examines how gender inequality in education directly affects family
economic conditions, as well as economic growth in general, by lowering the average level of
human capital. It proposes that women’s participation in the labor force in developing counties
expedites prosperity by extending credit to women’s entrepreneurship (often empowering and
improving theirs and their families’ economic conditions).
Women in Human Development
As mentioned in Chapter Three, a recent trend in scholarly literature is elevating human
development (HD) as the ultimate objective of human activity, replacing economic growth as the
ideal outcome (Ranis, Stewart, & Ramirez, 2000). Arguably, this movement’s intellectual
antecedent has its roots in the concept of human capabilities as put forward by Sen (1999) and
Nussbaum (2000). According to these scholars, human development enlarges people’s choices in
a way that enables them to lead longer, healthier, and fuller lives. Nussbaum (2000),
concentrating on women’s issues, argued that a “basic social minimum” must be considered
when evaluating the plight of women around the world. Nussbaum (2000) firmly asserted that
universal societal consensus (or values) would release women from patriarchal and cultural
injustices. The foundation of this “basic social minimum,” focusing on “human capabilities,” is
what women are able to do and how they can preserve their dignity. Nussbaum (2000) argued
“[A]ll too often women are not treated as ends in their own right, persons with dignity who
USE OF MOBILE TECHNOLOGY 46
deserve respect from laws and institutions. Instead, women are treated as mere instruments of the
ends of others” (p. 2). Nussbaum further claimed that the concept of “basic social minimum”
with regard to human capabilities can release women from being “the ends” to others—such as
their husbands—and allow them to chart their own destinies and rely on their own capabilities.
Even though the connection between economic growth (EG) and human development
(HD) is well documented among scholars (Adelman & King, 1998; Barro & Lee, 1994;
Mammen & Paxson, 2000), according to Ranis, Stewart, and Ramirez (2000), human
development should be given sequencing priorities. One can argue that, on one hand, EG creates
the resources as a foundation to HD; on the other hand, improving quality of a labor force for
both genders can be a critical contributor to EG.
According to Ranis et al. (2000), the specific factors linking HD and EG have not been
“systematically explored.” Therefore, it may make better sense to concentrate on human
development as a measurement of economic development. As Ranis et al. (2000) explained,
“Expenditure on HD-related items is strongly affected by the rate of poverty reduction” (p. 4).
Thus, if given the opportunity to earn extra income, a poor household increases its expenditure
on HD in the form of food, calorie consumption, and the over all well-being of the family. For
example, empirical data show the positive effects of increases in income on families in terms of
child schooling and health in Bolivia, Brazil, India, Indonesia, Pakistan, Philippines, Malaysia,
Nicaragua, and Peru (Ranis et al., 2000). When women are in charge of the cash income of the
family (Deshpanda, 2001; Mammen & Paxon, 2000; Ranis et al., 2000), expenditure patterns are
more concentrated on improving HD inputs (such as food and education). For example, Ranis et
al. (2000) explained that, among Gambian households, the larger the proportion of food under
women’s control, the larger the household’s caloric consumption. Similarly, in the Philippines,
USE OF MOBILE TECHNOLOGY 47
studies have shown that the consumption of calories and proteins increases with the share of
income accruing directly to women. Thus, we can make a solid argument that women’s access to
income has a direct correlation to improved HD. But in poor countries where women are mainly
assigned to child bearing and family enterprises, the major concerns are whether any resources
are even allocated to women and girls within families (Schultz, 1998), and whether women have
any access to income (Mammen & Paxson, 2000). According to Mammen and Paxson (2000):
In developing countries, there are costs associated with women working outside of the
domain of the family farm or non-farm family enterprises. At one extreme, laws may
restrict women form working outside the home; Afghanistan offers a current example.
Custom or social norms may also limit the ability of women to accept paid employment,
especially in manual jobs. (p. 143)
This dilemma generates the conditions by which women are marginalized in economic
participation.
Female Marginalization in Economic Participation
In poor-to-newly developing countries, women are held back from working off-farm jobs
because they are considered less compatible with child rearing. According to Mammen and
Paxson (2000):
Farm household models, such as those presented in a study by Squire and Strauss (1986)
are those that with no outside work opportunities, women will supply work to the family
farm/firm (so as to equate the marginal disutility of labor with the marginal product of
non-farm labor) rather than the market wage. In this case, the type and amount of work
that a woman does will be constrained by her family’s production opportunities and
characteristics. (p. 143)
Mammen and Paxson (2000) argued that industrialization might, in fact, prevent women from
entering the job market as much as of farm working moves men to blue-collar jobs. Golden
(1995) explained that as the men moved to blue-collar jobs, women were left out of those job
opportunities until they improved their education.
USE OF MOBILE TECHNOLOGY 48
Through the course of many years, as women have made strides in education—especially
in industrialized countries—the labor market’s trajectory has indicated some economic
participation by women). However, according to Mammen and Paxson (2000), women’s
economic opportunities are not keeping pace with men’s (early in occupational development) as
women are left out of such occupational development. This “female marginalization” was first
assessed in Boserup’s (1970) ground-breaking book on women and development, in which she
argued that industrialization altered women’s traditional social and productive roles. According
to Borserup (1970), women’s exclusion from employment translates into lower levels of HD and
well-being for women. Consequences also include such profound indicators as unequal
investment in both girl’s education and women’s participation in wage work. In her previous
work, Golden (1995) explained that, as the women’s education levels increase, their
development increases relative to advances by men. Golden (1995) noted that countries with the
least number of educated women tend to be least developed, and tend to mostly be in Africa,
followed by South Asia. This data offer strong indicators that women’s participation in the labor
force increases with more education.
Of equal importance are the expenditures that the developing countries allocate to HD.
According to Ranis et al. (2000), when countries prioritize demands such as military expenditure
and bureaucratic mismanaging of Gross National Product (GNP), the fault line between HD and
EG is clearly visible. In many countries, when a significant portion of GDP (Gross Domestic
Product) goes directly to the education and improved health of the people, EG is significantly
higher. Hill and King (1995), in studying the impact of gender inequality on GDP, discovered
that gender inequality in education significantly reduces GDP per capita.
USE OF MOBILE TECHNOLOGY 49
Gender Inequality in Education
Klasen (2002) has put forward the theory that inequality in gender education directly
effects economic growth due to lowering the average level of human capital. Klasen (2002)
further explained:
In addition, growth is indirectly affected through the impact of gender inequality on
investment and population growth. Some 0.4-0.9 percentage points of the differences in
annual per capita growth rates between East Asia and Sub-Saharan African, South Asia,
and the Middle East can be accounted for by differences in gender gap in education
between these regions. (p. 345)
Klasen (2002) suggested that human capital as aggregated well-being is measured by
“capabilities” (Nussbaum, 2000; Sen 1999), and insists that longevity and education be seen as
constituent elements of one’s well-being: “Given inequality aversion (or, equivalently, declining
marginal social valuation of these achievements), gender inequality, in these achievements, will
reduce aggregate well-being” (p. 346). Klasen (2002) explained that the problem of gender
inequality in education may also have an effect on gender bias and could undermine a number of
developmental goals, such as poverty reduction, decreasing child mortality rates and—most of
all—expanding education for the next generation.
Klasen (2002, citing Knowles, Lorgelly, & Owen, 2002), further explaining that
inequality in gender education reduces economic growth, offered the following hypothesis:
Assuming that boys and girls have a similar distribution of innate abilities, and that
children with more abilities are more likely to receive education, gender inequality in
education means that less able boys than [more able] girls have the chance to be
educated. As a result, the average innate ability of educated children is lower than it
would be if boys and girls had equal education opportunities. Assuming that the amount
of human capital, of a person, is the outcome of a combination of innate abilities and
education, gender inequality in education would, therefore, lower the average level of
human capital in the economy and, therefore, lower the impact of male education on
economic growth and raise the impact of female education. (p. 351)
USE OF MOBILE TECHNOLOGY 50
According to Klasen (2002), therefore, empirically speaking, this lower human capital should
directly reduce economic growth; but, to measure the effects of education as having a positive
impact on human capital, one must factor in the return in investment in education.
A study by Psacharopoulos and Patrion (2002) indicated that there is not a clear pattern in
the empirical results taken from the 40-plus-year history of estimates of returns-to-investment in
education. However, Psacharopoulos and Patrion (2002) also explained that the benefits of
education (from many countries based on econometric techniques) reaffirm the importance of
human capital theory.
Card (2001) suggested that the average rate of return to one more year of education
enhanced economic development by 10%. According to Psacharopoulos and Patrion (2002), the
ratio of returns from education to economic development varied with different countries and
regions (with Latin America, the Caribbean, and Sub-Saharan Africa having the highest returns
to schooling). For the effects of education to be fully understood, one must also consider what
scholars call the “social rate” of return, which includes social benefits and/or externalities. Such
benefits are known as “externalities” or “spillover benefits,” as they spill over to other members
of the community. In the case of education, these externalities are studied and measured on a
limited basis, but according to Venniker (2001), research provides ample support for human
capital externalities, enhancing “the productivity of other factors of production through channels
that are not internalized by the individual” (p. 117).
Schultz (2002), in studying representative household surveys, concluded that social
returns (to the years of schooling of females) are greater than the returns for males. Schultz
(2002) studied this phenomenon from the perspective of economic efficiency to maximizing
social output, not from gender equity. In most of the early literature on human capital, the
USE OF MOBILE TECHNOLOGY 51
emphasis was on male population, and returns were built on evidence of inequality in wage
differences among males. Schultz (2002) explained that early studies avoided the ambiguities
posed by women, and the problems of inferring labor productivity for persons outside the labor
force (as in most underdeveloped countries, the poor population of women rarely works for a
wage). According to Schultz (2002), with regard to examining empirical descriptions of wage
structures in many countries of the world:
When the log wage is regressed on years of schooling, the estimated coefficient on
schooling indicates the percentage change in wages received for attending an additional
year of schooling. This schooling coefficient has the additional interpretation of a private
internal rate on the family’s investment in the individual’s schooling. (p. 6)
Schultz (2002) concluded that, in terms of resource allocation in the family, increased schooling
of the mother “is associated with larger improvement in child quality outcomes than is the
increased schooling of the father” (p. 13). Schultz’s conclusion is based on (a) child survival, (b)
good nutrition, (c) early entry into school, (d) increased school enrollment adjusted for age, and
(e) more years of schooling completed on reaching adulthood.
In a landmark study of life expectancy and the family behavior of Taiwanese individuals
(who came of age from the 1940s onward), Parish and Willis (1993) found that, although parents
chose to invest in their sons’—versus their daughters’—education, their altruistic attempt to
make an optimal investment in their children’s human capital was frustrated by credit
constraints. Parish and Willis (1993) explained that this parental behavior contradicted most
other crude forms of East Asian models of patriarchal families. But a broader topic of
“empowerment” becomes relevant in studying the dynamics of a family when it comes to
investing in human capital.
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Economic Empowerment of Women
Empowerment is often described as a “proliferation of outcomes” (Malhortra, Schuler, &
Boender, 2002). Mason and Smith (2000) have equated empowerment with autonomy, whereas
Jejeebhoy (2000) has defined it as women controlling their lives in relation to family,
community, and market. Kabeer (2001), however, gave a widely accepted explanation of
empowerment as “The expansion in people’s ability to make strategic life choices in a context
where this ability was previously denied to them” (p. 19). Kabeer (2002) explained these choices
in terms of (a) resources, which are the conditions under which choices are exercised, and (b)
agency, which reflects women becoming involved as agents for change in the choices they are
making. Agency has its roots in Sen’s (1999) and Nussbaum’s (2000) human capabilities
concept, which defines it as removing various types of “unfreedoms” that inhibit women’s
choices. Mohan and Stokke (2000) put forward a new concept by equating agency to power.
According to Mohan and Stokke (2000), the development community has moved toward using
local “participation” and “empowerment.” But, according to Mohan and Stokke (2000), this
concept of participation and empowerment is based “on a harmony model of power” (p. 249). As
they explained:
Power resides with individual members of a community and can increase with the
successful pursuit of individual and collective goals. This implies that the empowerment
of the powerless could be achieved within the existing social order without any
significant negative effects upon the powerful. (p. 249)
But the role of gender in development cannot be fully understood without the sociocultural and
economic contexts in which development takes place. In the economic contexts, women’s
control over income, their relative contribution to family support, and their access to—and
control of—family resources are at the heart of women’s empowerment. According to Malhortra
et al. (2002), this finding is reflected in women’s access to employment, ownership of assets and
USE OF MOBILE TECHNOLOGY 53
land, and access to markets and credit. Creating opportunities for women to participate in
economic activities (either as well-paid employees or by making credit available to them to
become entrepreneurs in building small businesses) can help alleviate their poverty.
Women’s Entrepreneurship in Developing Countries
According to Tambunan (2009), one of the main causes of relative economic
backwardness in most underdeveloped countries is the lack of entrepreneurship, along with
limited capital, skilled workers, and access to technology. In recent years, however, small and
medium enterprises (SMEs) have rapidly become engines of economic growth, as well as one of
the main sources of employment, in developing countries. In Asian developing countries (such as
Indonesia, Malaysia, Thailand, Singapore, the Philippines, Brunei Darussalam, Lao PDR,
Cambodia, Vietnam, and Myanmar), according to Tambunan (2009), around 52 million SMEs
are in operation (Lim, 2008; Wattanapruttinpaisan, 2003) and employ about 75–90% of the
domestic workforce, including women.
The SME’s share of GDP (Gross Domestic Product) in many of these developing
countries is—on average—above 50%, with Cambodia reaching over 77% (Lim, 2008). As
Tambunan (2009) explicated, “As in other parts of the world, women’s entrepreneurship
development in Asian developing countries has also a tremendous potential in empowering
women and transforming society in the region.” (p. 39) Yet, in many countries (like Cambodia,
and especially places where the level of economic development is reflected in the level of per
capita income and the degree of industrialization is still low), this potential remains largely
untapped. According to Sinhal (2005), in some Asian developing countries, the number of
women participating in SMEs is less than 10%. Tambunan (2009) made a keen observation that
women’s entrepreneurship development is closely related to gender equity, which is lower in
USE OF MOBILE TECHNOLOGY 54
developing countries (compared to developed countries) and prevent women’s access to
entrepreneurship.
In Bangladesh and Nepal, according to Sinhal (2005), this lower number of women
entrepreneurs can be attributed to lack of access to credit and marketing networks, lack of access
to modern technology, lack of basic information, and—in more extreme examples—lack of
personal security and even the risk of sexual harassment. In discussing Pakistan, Roomi and
Parrot (2008) blamed this lack of access to the perceived inferior status of women in society.
There, women are underestimated as economic agents, and bias toward their gender is
“embedded in the regional, and/or feudal culture in the name of Islam.” (p. 20) Even though the
odds are stacked against the empowerment of women in third world countries, some findings
indicate that targeted programs (such as microfinancing and microlending) have helped women
in development. Deshpanda (2001), in reviewing a United Nations Capital Development fund,
claimed that 60% of the 29 institutions that she examined was oriented toward extending lending
opportunities to women across the world.
Microfinancing and the Development of Women
Microfinancing institutions have been very creative in developing products and services
that avoid barriers, such as collateral requirements, male or salaried guarantor requirements,
cultural barriers, and illiteracy, which often present impediments to women receiving such loans
(Cheston & Kuhn, 2002). According to Mead and Liedholme (1998), micro and small
enterprises (MSEs) have been a major source of employment in many third world countries. As
Mead and Liedholme (1998) explained, “In most countries, the majority of MSEs are owned and
operated by women. MSEs, headed by women, tend to be concentrated in a relatively narrow
range of activities: beer brewing, knitting, dressmaking, crocheting, cane work, and retail
USE OF MOBILE TECHNOLOGY 55
trading” (p. 38). Mead and Liedholme (1998) proffered some encouraging empirical evidence
on the new business start-ups in developing countries, showing that the rates of females starting
new MSEs in those countries were substantially higher than those of male-headed enterprises.
Main factors directly contributing to this success are microfinancing and microlending.
The idea of microfinancing started in the mid 1970s, when a team of researchers at
Chittagong University in Bangladesh, led by professor Mohammad Yunus (recently awarded the
Nobel Peace Prize for his work) and the Grameen Bank began a program of providing loans to
poor households in a few villages. According to Westover (2008):
Aspects of microfinance, such as microcredit, are designed to help lift individuals,
families, and communities out of poverty by providing small amounts of start-up capital
for entrepreneurial projects, which then presumably help individuals to generate income,
build wealth, and exit poverty. (p. 3)
What distinguishes microfinancing from the traditional financial system is the “joint liability
concept,” whereby borrowers (usually women mobilized in “peer groups” composed of four or
five individuals) are jointly responsible for each other’s repayment.
In the 1980s, many nongovernmental organizations (NGOs) developed additional models
for delivering credit outside the structure of the Grameen model. They experimented with a
model to provide loans to groups (comparable to the Grameen model of loaning to individuals
with peer monitoring), but ultimately the Bangladesh model of providing individual loans (to a
target group of poor households, with peer monitoring) prevailed. Especially in the 1990s, the
Grameen-style microcredit approach saw rapid expansion because lending institutions adopted
“franchising,” whereby new branches replicated the procedures and norms that prevailed in
existing branches.
In 2005, according to a World Bank report, over 7,000 microfinance institutions were
serving approximately 16 million poor individuals in developing countries (Westover, 2008).
USE OF MOBILE TECHNOLOGY 56
Although the reach and breadth of such microfinancing is well documented in terms of
empowering women and allowing them to take part in MSEs in growing numbers in developing
countries, many scholars have questioned whether such programs are actually helpful in
alleviating poverty. Collier (2007) insisted that the values of return for these kinds of programs,
especially MSEs, are so minimal that the programs should be “discarded.” Collier (2007) called
it a “development trap” in the broader scope of need for development and poverty alleviation.
He expressed concern for the lack of attention being paid to the needs of the large population in
58 countries who live in absolute poverty—what he calls the “the bottom billion.”
Other scholarly findings have concurred that the universal effectiveness of
microfinancing programs is fairly limited in alleviating poverty (Copestake, 2001; Duggar, 2004;
Goetz & Gupta; 1995; Westover, 2008). As Westover (2008) argued:
There are numerous studies that demonstrate the tremendous success of such programs
throughout much of the underdeveloped world. However, the universal effectiveness, of
microfinance institutions in alleviating poverty, is still in question and not free from
debate. Much of the evidence cited for the success of microfinance and microcredit, is
merely anecdotal or involves in-depth case-study approaches. While they provide vivid
examples and rich details of the impact and effectiveness of specific programs in specific
locations at specific times, generally, they fail to achieve more rigorous standards that
would allow for research findings to be widely generalized. (p. 1)
In cases of women receiving such credits, Copestake (2001) offered examples of “vicious”
cycles of debt, microcredit dependencies, increased workloads, and even domestic violence.
This information indicates that women in developing countries still battle marginalization in all
aspects of their lives.
This chapter examined women’s development in developing countries (through a broader
lens of human development), as well as the relationship between education and empowerment,
and the limited opportunities women in underdeveloped countries have for economic
development. Clearly, gender inequality in education has been a significant impediment to
USE OF MOBILE TECHNOLOGY 57
women’s development, as well as playing a key role in limiting human capital for women in said
developing countries. Although significant efforts have been made to empower women through
participation in economic and development programs (such as extending credit through
microlending for women entrepreneurs), underlying issues of poverty and gender inequality still
undermine the progress of women in developing nations. As discussed throughout this chapter,
many scholars argue that illiteracy serves as an impediment to development in general, and to
women’s development in particular.
The following chapters seek to present a case that development can happen despite
illiteracy by focusing on human capabilities, as discussed in previous chapters. The discussion
will be framed around the idea that mobile technology and mobile application use have the
potential to leap frog over these impediments (including illiteracy) and allow individuals to
participate directly in advancing their economic well-being. But this approach requires looking
at the world’s poor in a whole new light based on their capabilities as advanced by new
technologies regardless of their literacy aptitude. The chapters will posit that mobile technology
and mobile applications can facilitate empowerment in human development, especially when it
comes to women’s development issues.
The next chapter broadens the conversation about development by examining the
phenomenon of social networks and advancing the notion that the social capital prevalent in
social networks can significantly advance an individual’s capabilities to enhance his or her own
well-being. It will explain how social networks and social capital have natural platforms that can
complement the advancement of human development. Later chapters consider social networks
and social capital among women in rural Afghanistan as a conduit that enlarges their capabilities
(via mobile phone technology and mobile phone application) and advances their well-being.
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CHAPTER FIVE:
SOCIAL NETWORKS AND THEIR ROLE IN DEVELOPMENT
Some recent scholarship on the issue of development advocates network and “network
thinking” (Capra, 1996). On this subject, Capra has explained how connectedness and
relationships, as the essential properties of living systems, are properties of the entire whole and
not of the specific parts. Connectedness and relationships make network thinking an ideal
approach that can be applied in development. The “metatheoretical rationale” of this conception,
according to Gould (2003), assumes that the world is made up of “relations” primarily and,
“individual entities” secondarily. Thus, social networks provide a platform for these relations to
foster into connectedness that can, in turn, be harvested for social and economic benefit.
This chapter will examine networks from the perspective of social networks and explain
how the dynamics of a social network and its structure have a direct bearing on how effective the
network is (as a conduit for providing benefits to its participating members and, ultimately, its
contribution to economic development). It puts forth the idea that social capital within a social
network can contribute to economic development in general, and that social capital can be
instrumental in poverty alleviation by enlarging individual’s capabilities.
Social Network Analysis, Social Network Structure
Personal networks have long been considered a strong asset, and are frequently
designated as a kind of capital. Individuals rely on these networks to seek jobs and other
opportunities and quick assistance when they are under pressure, such as with daily needs with
childcare and, most of all, emotional support (Wellman & Worthely 1990). In many cultures, the
importance of social networks is well-documented (in both economic returns and social
belongings). In China, for example, adults use social networks to manipulate and mobilize social
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resources for economic and social gain. Currently, in many developing countries, family ties and
relationships (in the form of networks) provide an engine for economic survival and, ultimately,
an impetus for economic development (Wong & Salaff, 1998). In recent years, many scholars in
the field of development and social sciences have explored these ties and relationships through
what is known as “social network analysis,” presenting human behavior and social change from
a relational perspective.
Social Network Analysis
Historically, the relationship between individuals and their society has been the subject of
sociological analysis. These analyses have continually been catalysts in identifying mass
behavior. But social network analysis is about explaining social change in methodological terms
through the lens of a relationship between the individual and society (Vera & Schupp, 2006).
Social network analysis (SNA) is a tool for measuring social ties among actors in a network,
derived from research in the 1950s and 1960s.
Originally designed to demonstrate the network structure of sociograms, SNA gradually
evolved into a collection of methodological techniques for collecting and analyzing data about
social relations (Gould, 2003). According to scholars, SNA is largely based on the concept of a
reciprocal relationship between individuals and society that is defined by both similarities and
differences (Gould, 2003). Individuals are identified as “nodes” or “points,” and their relations
with other individuals as “lines” or “ties” (Vera & Schupp, 2006). Gould (2003) explained this
relationship in terms of connectivity, calling it a “connectivity-oriented approach” that focuses
on the connection of each of the network nodes by frequency and distance of their connections.
Distance is the number of steps a node must take to reach all other nodes in the network and is
generally known as degree of separation. According to Vera and Schupp (2006) this dynamic
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explains the density of the network with regard to connections between more central and more
peripheral actors. Such analysis is important because of the role that an actor plays in shaping the
characteristic of a network. This information is useful because it offers analysis on how blocks
(or groups) form alliances and how blocks are structured with respect to one another. By
comparing the changing positions of the groups’ centralities and peripheries over time, SNA can
determine how blocks’ structural embedding affects their capacity to be influential (Vera &
Schupp, 2006). Here, the centrality of the actors (or nodes) can determine the influence that
actors exert in the network (Borgatti & Jones, 1998). Centrality also illustrates the solidarity
effect, which is the social cohesion that results from interconnections among these central nodes
(Coleman, 1990).
Granovetter (1983) has referred to links between these nodes as “weak” or “strong” ties.
Generally speaking, links to family members or close friends are strong ties, whereas tentative
ties to acquaintances are weak ties in a network. Granovetter (1983) suggested that individuals
with weak ties in a network have advantages when they link themselves to other social circles for
information that is generally not available in their own circle.
Social network analysis can be explained through the patterns of relations between and
among actors. If these patterns (in a given network) can be identified, it is possible to
deliberately influence information flow (for example, social mobilization) by stimulating certain
strategically located nodes (Vera & Schupp, 2006). Wong and Salaff (1998), in a study of Hong
Kong immigrants in the United States, made an interesting observation that reliance on kin ties
and strong linkages is more characteristic of the working class, whereas members of more
affluent classes are disinclined to make use of such ties and refuse to seek help from family
members and relatives. According to Vera and Schupp (2006):
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SNA is based on four theoretical propositions: 1) Actors in a social system are
interdependent, not independent, 2) Actors are related through links that channel
information, affection and other resources, 3) The structure of those relations both
constrains and facilitates actions and 4) The patterns of relations among actors define
economic, political and social structures. (p. 408)
They further suggested, “In this sense, a ‘social network’ is defined as the amalgamation of ties
among actors, whereas ‘social structure’ is the pattern those ties assume” (p. 408). Patterns of
relationships among actors in a network have an impact on how successful the network is in
providing benefits to members and, ultimately, to economic development (Emirbayer &
Goodwin, 1994). Social network structure defines the pattern of such relationships and is
instrumental to how successful a network is in rendering social and economic benefits to its
members.
Social Network Structure
Network design and structure have a direct bearing on how effective a network is as a
conduit to providing social and economic benefits to its participating members. Scholars
typically gauge the effectiveness of a social network by the ability of individuals to attain goals
within the network. Social networks can offer individuals access to information, resources, and
opportunities (Campbell, Marsden, & Hurlbert, 1986; Coleman, 1990; Podolny & Baron, 1997).
Another equally important phenomenon associated with attaining goals in a network is a network
member’s ability to alter or exploit—for his or her own benefit—the dense pockets of relations
within a network (Burt, 1987, 1992). According to Burt, the network structure can be explained
in terms of closed networks, which are densely embedded with many connections, and open
networks, in which actors can build relationships with multiple disconnected clusters. Social and
economic benefit is produced from the “brokerage opportunity” created by dispersed ties that
encompass an individual’s direct ties, indirect ties, and some ties that are redundant in leading to
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the same actor. Burt (1987, 1992) called these last ties “structural holes.” Ahuja (2000)
explained, “Structural holes are gaps in information flows between alters linked to the same ego
but not linked to each other” (p. 427). Ahuja (2000) further explained Burt’s strategic
configuration of structural hole, suggesting, “Designing networks to maximize disconnection (or
structural holes) between alters and selecting alters with many other partners (or many indirect
ties) are two mechanisms by which actors can develop efficient and effective networks” (p. 428).
Figure 1. Illustration of direct ties, indirect ties, and structural holes in two networks.
Note. Ahuja, 2000, p. 428.
Walker, Kogut, and Shan (1997), explained:
It is exactly the structural constraints on what people know and what they can control (in
a closed network created by the inheritance of past relationships) that present the
opportunities for brokers. These brokers seek out partners with whom they can form
unique, or “non redundant” relationships that bring new information and the possibility of
negotiating between competing groups. Through forming these new and unique
relationships, entrepreneurs then begin to transform network structure. (p. 110)
The open network structure offers more opportunities through which to influence and/or
manipulate the network, and steer the network to create social movements or economic outputs.
In the case of the Ukrainian “Orange Revolution” in 2004, massive protests were organized
through infiltration of these kinds of networks (Vera & Schupp, 2006). Through brokerage
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facilitation, groups with diverse ties were brought together under a single auspice of the Orange
Revolution. As Gargiulo and Benassi (2000) have explained:
Rather than stressing the ability of consistent norms fostered by cohesive networks,
structural hole theory claims that the benefits of social capital result from the diversity of
information and the brokerage opportunities created by the lack of connection between
separate clusters in a social network. Players who occupy brokerage positions, between
those clusters, have better access to information and enjoy comparative advantages in
negotiating relationships, which allow them to know about more opportunities [that] they
choose to pursue. (p. 3)
In a closed cohesive network, an individual may naturally benefit from the support provided by
the network, but the loyalty-to-group obligations (that are a result of those benefits) sometimes
curtail an individual’s ability to pursue new opportunities (Gargiulo, & Benassi, 2000). In closed
cohesive networks, group solidarity reduces the ability of members to cooperate with outsiders.
For example, in parts of China and East Asia, and portions of Latin America, social capital is
largely the domain of one’s family or close, limited circles of friends (Wong & Salaff, 1998).
Many outsiders are considered “strangers,” classified in categories other than “kin,” and
subsequently regarded with a lower standard of moral behavior than outsiders. A public official,
for example, may dabble with corruption or may feel entitled to steal on behalf of his family
because he (or she) considers others—or even government institutions—outside-the-circle of his
own social capital. The deficit of trust toward outsiders ultimately creates a two-tiered moral
system, whereby one’s strongest relations are reserved for family (and kin) and one behaves
most opportunistically toward outsiders (Fukuyama, 2002). Much of today’s corruption in
countries like Afghanistan and Africa stems from such cultural norms. In some cases, this lack of
social trust may be the result of sectarian conflicts or war, but—often enough—corruption
reflects these societies’ reliance on closed-cohesive-networks of family and friends.
Closed cohesive networks (such as family networks with a strong reliance on cultural
norms and values of trust) may, indeed, provide benefits to their members. As Woodlock (2000)
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has explained, “Intuitively, then the basic idea of ‘social capital’ is that one’s family, friends, and
associates constitute an important asset, one that can be called upon in a crisis, enjoyed for its
own sake, and/or leveraged for material gain” (p. 3). Studies of social capital inform us of the
opportunities availed to actors within a network to access certain resources. According to Vera
and Schupp (2006), “SNA is instrumental in operationalizing the study of such opportunities by
means of locating the position of the actors within a given network” (p. 412). The next section
explores social capital and its impact on economic development.
Social Capital in Social Networks
In a network’s formation there are generally two opposing forces in action. The first is
the “reproduction” of network structure as a general social resource for network members. The
second is the “alteration” of network structure, by entrepreneurs for their own benefit. The
reproduction of a network depends largely on the start-up values—compared to the rate of return
in opportunities. The structure of a network indicates where the opportunities lie within a
network (Walker et al., 1997). Social resources in this paradigm are explained in terms of social
capital.
Popularized by Putnam (1995), social capital refers to the features of a social network
that are based on norms and trust—features that facilitate cooperation among members for the
purpose of mutual benefits (Mohan & Stokke, 2000). Here, the network has a tendency to
reproduce an inherited pattern of relationships among individuals and a group in order to
enhance more-or-less institutionalized relationships (Bourdieu, 1990; Coleman, 1990). Inside
these networks, social capital nourishes reciprocity and facilitates information flow among
actors. Thus, social capital is the sum of the resources that are available to an individual or a
group of individuals by virtue of possessing a durable network of mutual acquaintanceship
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(Bourdieu & Wacquant, 1992). In other words, social ties in a group enhance an actor’s ability to
attain his or her goals. In broader terms, social capital also refers to people’s ability to work
together productively in a group (Coleman, 1990).
Fukuyama (2002) has defined social capital in broader terms as, “Any instance in which
people cooperate for common ends on the basis of shared informal norms and values” (p. 23). In
this sense, social capital refers to the means of (a) enforcing norms of behavior among
individuals and (b) acting as a resource (Walker et al., 1997). Coleman (1990) has referred to a
fully connected network as a cohesive closed network, explaining that actors have access to
social capital as a resource that can help develop norms for acceptable behavior in the group.
Members of a closely knit network can trust each other to honor obligations, which
diminish the uncertainty of their exchanges while enhancing their ability to cooperate in the
pursuit of their interests (Coleman, 1988, 1990). Gargiulo and Benassi (2000) have explained
that the amount and availability of social capital to an individual is directly determined by the
network in which he or she is embedded. Thus, the pursuit of an individual’s goals requires the
others in the group to actively cooperate (Gargiulo & Benassi, 2000).
Social Capital and Economic Development
Recognition of the importance of social capital in economic development is a fairly
recent phenomenon. One can reasonably claim that, in recent years, consensus has been building
in the scholarly literature (such as reviewed here) that emphasizes the importance of social
relations as social capital in development.
Social capital offers a way to bridge sociological and economic perspectives, providing a
better explanation of economic development theory. Many scholars now believe that economic
growth is shaped by the nature and extent of social connectivity and interactivity between and
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among individuals in the community (Woolcock & Narayan, 2002). Thus, this section discusses
how an economic theory of development must take into account the embeddedness of economic
life in social networks, specifically through social capital.
Dissenting views in the scholarly literature reviewed here are more cautious about the
importance of social capital in economic development, reflecting methodological concerns, as
well as concerns with externalities; they argue that social capital is not a public good but a
private good (Fukuyama, 2002). But Durkheim (1984) claimed that social capital, in fact, shapes
not only the goals that people seek, but also how and when they seek them. Thus, for network
theorist Woolcock (1998), social capital is one’s non-rational social ties. Thus, one could make
the argument that, according to many sociologists, social capital, in broad terms, encompasses
the facilitation of collective action for mutual benefits (Woolcock, 1998). Granovetter (1983)
went a bit further by claiming that all economic actions are somehow embedded in social
relations—of one configuration or another. Braudel (1985) furthered this argument, claiming, “It
is too easy to call one form of exchange economic and another social. In real life, all types are
both economic and social” (p. 227). But, in a purely economic sense, social capital refers to a set
of expectations to be acted upon within a group that affects the economic goal and goal-seeking
behavior of the members (Ports & Sensenbrenner, 1993).
Many economists believe that development can only be expressed in building institutions,
but that belief misses the relationship between culture and institutions (Fukuyama, 2002).
Culture is often mistakenly seen as an end in itself, as a form of creative expression, but the
importance of culture lies in the social capital in the form of norms and values that promote
social cooperation (Fukuyama, 2002). Fukuyama has expressed belief that social capital is a
“utilitarian way of looking at culture,” (p. 25) even though he believes that, “The greatest
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weakness of the social capital concept is the absence of consensus on how to measure it.” (p. 28)
Measuring social capital from the perceptive of culture makes it easier to assess social capital’s
economic impact. For example, in societies where trust is a vital part of cultural norms and
values, economic development seems to be fostered at a more rapid pace.
Fukuyama (2002), in studying Latin American countries, for example, noted that the
GDP (Gross Domestic Product) in some of these countries is heavily dependent on family-owned
businesses. A large majority of these businesses are interconnected in sprawling networks that
connect different businesses. These networks are, by and large, based on kinship that promotes
the infusion of sons, daughters, and cousins into the businesses within said networks. The
strongest bonds (fostered among members in the network) are based on cultural norms of trust.
The trust factor in social capital has been shown to bear an important correlation to the
level of economic investment in a society. Knack and Keefer (1997), after examining World
Values Survey data about trust in 29 countries, concluded that trust can be measured as a
predictor of the levels of investment in society.
In developing countries, social capital can be viewed as an important asset for
development because when the social network of the poor expands so does the poor’s welfare
(Woolcock & Narayan 2002). Poor women in Indian villages, lacking sufficient collateral to
qualify for loans, have been given microlending through Grameen Bank and other institutions,
solely based on the impoverished female’s membership in a small peer group. As these women
invest in small businesses, their families’ welfare is enhanced.
Analysis of data from poor communities in rural north India indicates that social groups,
among poor villagers serve important roles in terms of protection, risk management, and
solidarity (Woolcock & Narayan 2002). Enterprises among the poor population often form
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networks to defend their interests against larger businesses. This phenomenon is repeated around
the world. In her study of the relationship between the structure of business networks and
enterprise performance in Africa, Barr (1998) reported that poor entrepreneurs (operating small
local firms in many traditional industries) put their resources together to form what she calls
“solidarity networks” to reduce their vulnerability against giant conglomerates. A study of social
capital in poverty alleviation conducted by the National Participatory Poverty Assessment in
over 1,400 households at 87 villages in Tanzania concluded that (for Tanzania villagers) social
capital was both “social” and “capital,” generating returns that far exceeded the returns from
human capital alone (Narayan & Pritchett, 1999). Such solidarity networks are very much in
place in many remote villages of developing countries. In Afghanistan, for example, women in
the remote villages function in highly organized solidarity networks that promote the
sustainability and individual well-being of their members. Women collectively produce many of
the essentials for their lives. Networks of women now participate in the production of pottery,
garments, and carpets, as well as producing cheese and other food products. Stewart (2005) has
examined network solidarity from the perspective of the capabilities approach. Calling such
efforts “groups and capabilities,” Stewart (2005) suggested that groups (solidarity networks) are
a critical and direct source of well-being as a mechanism for the enlargement of individual
capabilities. He suggested that well-being and capabilities of individuals might be advanced by
being part of a group. Furthermore, he suggested that a person’s well-being is affected by how
well the group to which he or she belongs is doing.
Social capital in a social network is often measured through formal and informal
connections. A study by the World Bank’s Social Development Department in Indonesia,
Bolivia, and Burkina Faso focusing on (a) density of associations, (b) heterogeneity of
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membership in associations, and (c) active participation, demonstrated that social capital
contributes (in significant ways) to the welfare of households. As a result, social capital is
considered the capital of the poor (Narayan & Pritchett, 1999).
Other important factors influencing social capital in developing countries are often
overlooked in the scholarly literature. For example, social capital embedded in norms and values
of trust facilitates exchanges between members and reduces the cost of transactions. Social
capital also permits trade among members in the absence of formal contracts and, in some cases,
provides collective management of resources (Fukuyama, 1995).
Critiques of Social Capital
Dissenting literature on social capital (in relation to economic development) offers a
compelling argument. Noted economist Robert Solow has even gone so far as to complain about
the use of the word “capital” in social capital, calling it “misleading” because he sees the word
capital as implying a homogeneous, and consequently measurable, commodity that social capital
is not. Other dissenting voices in the literature argue that no broadly accepted standard for
measuring social capital or incorporating it into conventional economic models exists. Some
scholars have argued that social capital is a “private good” not a “public good,” and therefore
produces many positive and negative externalities (Dasgupta, 2000).
Some scholars have also questioned the effectiveness of trust itself (which is central to
the concept of social capital) and even view trust as a liability in economic development. In the
case of family-owned businesses, for example, noted economist Edward Banfield (1958)
explained how strong trust in only the circle of family may force family kin to distrust all
strangers. He suggested that family businesses have trouble growing (into large, professionally
managed enterprises) due, in part, to lack of trust of people outside the family. This lack of trust
USE OF MOBILE TECHNOLOGY 70
limits business transparency, which makes it difficult for investors and outside partners to
participate in the expansion of such businesses, ultimately putting limits on economic growth
(Fukuyama, 2002).
Other scholars have pointed out that in developing countries some social networks are not
readily available to all segments of the population. Participation may depend on whom you know
(Peterson & Ronstadt, 1987), or (in the case of “old boys” networks) it can be difficult for
women to penetrate (Belcourt, 1991). Also notable is that, in societies where a complete social
breakdown of society has occurred due to war and conflict, building social capital and social
trust may be the first item in the agenda before attempting to ascertain any correlation between
social capital and development.
This chapter explained that social networks have a direct correlation to economic
development, but that the degree and effectiveness of such correlation depends largely on the
way these networks are structured. The ultimate measurement of social network success can be
gauged by the amount of social capital created for the benefit of members and the network’s
development in general. The assertion from social capital theory about its relation to economic
development may not be if the two have any direct correlation, but how to harness the positive
aspects of social capital in social networks to generate measurable outcomes that improve the
economic well-being of individuals. As such, this chapter suggested that the merger of solidarity
or group networks to capabilities in the context of social network and social capital provides a
pathway that advances an individual’s capabilities and well-being. The next chapters will
discuss the introduction of mobile technology and mobile applications as facilitators in
advancing capabilities in this dynamic.
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CHAPTER SIX:
MOBILE PHONE FOR DEVELOPMENT: ADVANCING WOMEN’S DEVELOPMENT AND
WOMEN’S CAPABILITIES IN AFGHANISTAN
In recent years, mobile phones have increasingly played important roles in assisting
development across many developing countries. This chapter will explore current trends in
development through the use of mobile technology and mobile applications around the world. It
will examine the use and growth of mobile technology by women and the role it can play in
enhancing their development. It will further consider the use of the mobile phone and mobile
applications in Afghanistan, and their remarkable diffusion among female population, proposing
that mobile phone use there among the female population can be the next major development
shift that can enlarge their capabilities and advance their well-being.
Mobile Technology for Development
In recent years, mobile technology has had an explosive growth around the world. With
over 6 billion customer connections, mobile phones are now the most common information and
communication technology devices (ICT) in the world (Chetan Sharma Consulting, 2011). Most
striking is that the use of mobile phones to access the Internet, according to a document
published in 2011 by the International Telecommunication Union (ITU), has now surpassed land
line Internet access by over 3.5 billion users (ITU 2011). This information is particularly
important given the goal of empowering individuals via mobile phones; this connection to
worldwide e-commerce via mobile phone is essential.
According to Bold and Davidson (2012), “Mobile broadband, or high-speed access to the
Internet and other data services over mobile networks, is already changing the way people across
the globe access the Internet” (p. 67). This access is providing unprecedented opportunity to
USE OF MOBILE TECHNOLOGY 72
empower people across all socioeconomic classes. Another statistic worth noting is that for the
first time in 2009, data traffic via mobile phones exceeded voice calls across the world’s mobile
networks (Ericsson, 2010).
Some important trends in accessing the Internet via mobile phone around the world are
worth noting here. According to Digital Stats (2011), more that 250 million Facebook members
access their Facebook portfolios via their mobile devices. Gartner (2011) reported that, in 2010,
total downloads of mobile applications reached 8 billion and is anticipated to reach over 100
billion by 2015. According to Bold and Davidson (2012), the emergence of mobile computing,
through Smart Phones represents the latest trend, presenting the fastest growing segment of
mobile technology use. Over 4 billion smart phones are expected to be shipped from 2011 to
2015, making them the most “go to” device in computing and Internet access.
As of 2014, smart phones offer an array of important functions, such as web browsing
and computing capabilities, as well as high-definition video, access to social networks, mobile
banking, and many other compelling services. What makes a smart phone different from a basic
phone is its variety of applications in the form of mobile phone apps, which enables users to
instantly access products and services. Many local mobile phone developers in developing
countries have been able to overcome infrastructure shortages by developing applications or
Value Added Services (VAS) supported by narrowband mobile communications through scaled-
down Internet browsers, SMS, social networking, and pay-as-you-go mobile data access (World
Bank, 2012).
Mobile phones have brought new possibilities in development around the world—from
across urban-rural and rich-poor divides—connecting individuals to each other, to information
centers, to markets, and to public service providers (Aker & Mbiti, 2010). As mobile phone and
USE OF MOBILE TECHNOLOGY 73
mobile phone applications are becoming increasingly available—and at a very affordable rate to
billions of people at the margin of the economic scale—the questions to ask are, how can this
technology be harvested to empower many poorer and illiterate people? And, most importantly,
how can this technology be used for self-empowerment?
According to Aker and Mbiti (2010):
In Mali, residents of Timbuktu are able to call relatives living in the capital city of
Bamako—or relatives in France. In Ghana, farmers in Tamale are able to send a text
message to learn corn and tomato prices in Accra, over 1,000 kilometers away. In Niger,
day laborers are able to call acquaintances in Benin to find out about job opportunities
without [taking a] US$40 trip. In Malawi, those affected by HIV and AIDS can receive
text messages daily, reminding them to take their medicines on schedule. (p. 1)
Aker and Mbiti (2010) have described the effects of mobile technology in development—in rural
Africa in particular—as dramatic. Aker and Mbiti suggested that, in Africa, mobile phone
technology has shifted from a simple communication tool to a service delivery platform.
According to Aker and Mbiti (2010), “Mobile phones have greatly reduced communication
costs, thereby allowing individuals and firms to send and obtain information quickly and cheaply
on a variety of economic, social and political topics” (p. 1).
A case study conducted by the United States Institute for Peace (in conjunction with
Mobile Accord, TechChange, the UN-mandated University for Peace, and the National Defense
University, entitled “Can You Help Me Now? Mobile Phones and Peace Building in
Afghanistan”) indicated that mobile phones and their various applications, in Afghanistan in
particular, have proven exceptionally useful for social change and economic development.
Mobile phone apps such as Mobile Money Transfer (MMT), Short Message Services (SMS) and
Interactive Voice Response (IVR), have been, according to this report, powerful mechanisms for
promoting economic development and social change. Such mobile applications have been
instrumental in providing market information, such as information about commodity prices for
USE OF MOBILE TECHNOLOGY 74
farmers in the agriculture sector, and strengthening local governance and civil society, such as
paying civil servants their salary via mobile banking. Another fast-growing development
phenomenon through the use of mobile phone is mobile banking. Mobile phone banking through
virtual accounts has the potential to provide financial services to millions of poor people around
the world who are considered “unbanked.” Owens and Anna (2006) suggested that this mobile
banking has expanded the reach of financial service providers to rural areas, especially in the
area of microfinance transactions.
Mobile money is a mobile application that allows individuals to make financial
transactions via their mobile phones. In sub-Saharan Africa, the use of Mobile money has
presented a revolutionary trend toward virtual banking in the rural areas. According to Jack and
Suri (2011) in 2007, Kenya’s leading mobile phone company launched a mobile money transfer
system called M-PESA. The significance of the service was its SMS-based money transfer
system, which allows individuals to deposit, send, and withdraw funds from their mobile phones.
According to Jack and Sure (2011), by the end of 2009, M-PESA was reaching over 65% of
Kenyan households. In the Philippines, an SMS-based system called G-Cash serves as an
electronic wallet, enabling individuals to receive cash and make payments in phone-to-phone
domestic and international fund transfer, all via their mobile phone (Owens & Anna, 2006).
Jack and Suri (2011) have articulated the five-point economic impact of mobile money
providers such as M-PESA:
First, it simply facilitates trade, making it easier for people to pay for, and to receive
payments for, goods and services. Second, by providing a safe storage mechanism, M-
PESA could increase net household savings. Third, because it facilitates inter-personal
transactions, it [can] improve the allocation of savings across households and businesses
by deepening the person-to-person credit market. Fourth, by making transfers across
large distances trivially cheap, M-PESA improves the investment in, and allocation,
human capital as well as physical capital. Fifth, M-PESA could affect the ability of
individuals to share risk. Informal risk-sharing networks have been found to be an
USE OF MOBILE TECHNOLOGY 75
important, although not fully effective, means by which individuals spread risk, making
state-contingent transfers among group members. (p. 10)
Jack and Suri (2011) further suggested that M-PESA could become instrumental in empowering
women in particular, especially among poor populations in rural areas, with Afghanistan being a
prime example.
The use of M-Paisa has also been significant in expanding many other economic
development opportunities—especially the reach of microfinance institutions. For example,
microfinance institutions in Afghanistan are utilizing M-PESA for microfinance loan payments,
which enable innovators to expand their reach into many rural areas without any significant
addition to their personnel.
The use of Interactive Voice Response systems, which enable an individual to
communicate via voice and not via keyboard, have been another mobile phone application that
has shown considerable success in Afghanistan. This mobile application has the potential to
significantly alter the way information is received and disseminated. The use of this technology
can be instrumental in bypassing many developmental hurdles (such as reading and writing, and
competent technological literacy), enabling individuals to expand their capabilities to participate
in economic development, regardless of their ability to fluidly read or to write intelligibly. For
example, a poor woman in a remote village of Afghanistan can apply for a microfinancing loan
via a voice-activated mobile phone, without filling out the burdensome applications usually
required for such transactions. In Afghanistan, a program called TAMAS—developed by
Development Alternative, Inc. (DAI), Mercy Corps, Roshan, and USAID—has incorporated
Interactive Voice Response (IVR) by providing commodity pricing assistance to farmers via
their mobile phones. According to Himelfarb (2010), “The TAMAS program, developed by
DAI’s USAID-funded agriculture program… provides 500 producers, suppliers, and salesmen
USE OF MOBILE TECHNOLOGY 76
with price updates on twenty-five commodities at eleven different locations.” Most importantly,
given the inability of so many farmers to read text messages, the program now offers this
information to the farmers not via SMS messages but by IVR. Because of these advancements in
mobile technology, we can reasonably predict that anyone—even with very little or no education
at all—can use these mobile applications to engage in economic activities. These mobile
applications may have a significant impact on development issues for women around the world,
specifically in empowering women to advance their social and economic development.
The Use of Mobile Technology in Women’s Development
Mobile phones and mobile phone applications have a significant impact on gender
empowerment as part of a broader human development agenda. The most encouraging example
comes from the Grameen Bank project, in which rural Bangladesh women have used mobile
phones to make significant strides in their development. The Grameen Bank has been extending
loans to women to obtain mobile phones since 1997. Grammen’s village pay phones have also
delivered significant benefits to poor women in rural Bangladesh areas.
According to Tenhunen (2008), the use of mobile phones is widespread among women in
many parts of the world. Tenhunen (2008) explained, “In Chennai, India, the Foundation of
Occupational Development (FOOD) has given women micro-entrepreneurial training in
marketing, but has also provided them with mobile phones. The phones have increased women’s
earnings and empowered them to take new initiatives” (p. 517). According to Tenhunen (2008),
the use of mobile phones by women mitigates the disruption of social networks and maintains or
increases their social capital.
In the war-torn decades in Afghanistan, and in particular during the Taliban reign,
women’s lives were significantly constrained, as they were banned from education and
USE OF MOBILE TECHNOLOGY 77
participating in economic development. In 2007, in partnership with AfghanAid, Roshan
launched the Women’s Public Call Office (WPCO), which is essentially phone booths run by
women that can be used for domestic and international calls. Such opportunities in the remote
areas of Afghanistan when merged with mobile applications like M-Paisa (Afghanistan’s version
of M-PESA) and IVR can empower women to make gigantic steps in connecting to the world of
e-commerce.
These steps in the use of mobile programs and mobile app technologies may be small in
scope but they offer a significant shift in development. There is a move away from
macrodevelopmental theories toward broad individual empowerment by providing opportunities
for education and healthcare at the institutional level and advancing capabilities through smart
technology at the individual level.
Mobile programs and mobile applications expand the potential for individuals to use and
explore their capabilities in the context of a human development approach. For example, a
woman in a remote village in Afghanistan, regardless of her level of literacy, with a voice-
activated mobile phone and M-Paisa, can instantly connect to the greater world of commerce to
advance her economic well being. This technology offers her the opportunity to produce and
present products and services based on her capabilities and deemed to be of value to the greater
world of commerce. This model is not an orthodox developmental policy of building institutions
and structures for education, health, and economic development, but rather a way of empowering
individuals to participate in activities that enable them to meet their economic needs.
A landmark survey of Afghan women’s access to mobile technology by the USAID in
2013 painted a picture of great achievement in mobile use by Afghan women, in general, and in
rural areas, in particular. What is further remarkable is that the women surveyed viewed mobile
USE OF MOBILE TECHNOLOGY 78
phones as devices to advance their lives. According to this survey, as recently as 2012, over 80%
of Afghan women had regular or occasional access to a mobile phone. The survey also revealed
how mobile phone use is far-reaching among many diverse groups of women, from the educated
to the illiterate and poor. Almost 48% of women surveyed owned a mobile phone, and another
32% had access to some shared phone owned by a family member or a neighbor.
Such statistics suggest that mobile phones transcend social, economic, and geographic
boundaries like no other developmental tool. As proposed earlier, mobile technology and mobile
applications can be a game-changer for women development in rural Afghanistan. Also striking
in this survey is that over 44% of women in the rural areas of Afghanistan owned a mobile
phone, and another 32% shared one with a family member. The report indicated that one-quarter
of women used their mobile phones to access commercial and social services. By and large, a
great majority of women in the survey indicated that mobile phones can enhance their lives and
improve their family’s well-being. This finding suggests that mobile phone use by women in
rural Afghanistan advances daily life, integrating them into social networks and ultimately
increasing their social capital.
Harnessing such capital could (in broader terms) offer opportunities to advance social
network systems and social capital via mobile phones. It is not farfetched to assume that a group
of rural Afghan women could advance their income-producing capabilities collectively via many
platforms offered through mobile applications and e-commerce websites.
The Use of Mobile Phone Applications for Development in Afghanistan
Afghanistan has become an incubator for high-value mobile-based applications that are
used in many economic development programs, and correspondingly, in support of policies for
social change in the country (Himelfarb, 2010). This explosive growth in mobile usage in
USE OF MOBILE TECHNOLOGY 79
Afghanistan now accounts for over 20 million subscribers, where the total population stands at
30 million citizens. According to Himelfarb (2010), “A number of factors have fueled this
dramatic increase, including the sheer popular demand for communication, and absence of viable
landline substitutes, government deregulation, and a competitive market that flourishes despite
the conflict” (p. 1).
According to a 2009 report by the Asia Foundation, 52% of Afghan households in 2009
had a mobile phone. According to the report, this explosive growth in mobile phone subscription
continues at an annual rate of 53%. If the trend continues, Afghanistan will become one of the
countries with the most mobile phone subscribers per capita in the developing world—all due to
the fact that the Afghan government and the international community have identified the use of
mobile technology to be the optimal vehicle for communication in the country and have
encouraged public-private partnership in its development. Based on current development projects
by Afghanistan’s Ministry of Communication and Information Technology, by 2016, the ICT
Sector will quadruple the number of Internet users by lengthening the fiber optic networks and
connecting most of Afghanistan’s provinces.
Afghanistan’s Ministry of Communication and Information is projecting a target of
mobile telephone penetration to 80% of the population. In a 2011 report, the government entity
claimed that a 10% increase in mobile phone penetration may very well have a 0.6% impact on
GDP. Kabul is slated to launch its first telecommunication satellite, which will provide both
greater access to Internet usage and 3G Internet capabilities to rural areas. A report published in
the February 12, 2011 in Mediaglobal.org claimed, “The mobile access has also created new
economic opportunities. Lacking confidence in the country’s banking institutions; Afghans have
taken advantage of the mobile money service providers M-Paisa.” Although its primary purpose
USE OF MOBILE TECHNOLOGY 80
is to microfinance clients by providing loan disbursements and repayments, this service also
provides the 97% of Afghans without a bank a wide range of fast and secure financial services
through their phones. Consequently, entrepreneurs and business owners are benefiting from the
new access.
Mediaglobal.com further claimed that such innovation has already spurred an
entrepreneurial spirit in Bamyan (a remote province in Northern Afghanistan), producing
exchanges in the bazaars (local markets) that have a broader economic impact (such as the
emergence of a vibrant tourism industry in the area). According to the Afghanistan
Telecommunication Regulatory Authority, over 80% of Afghanistan has network coverage. This
availability offers great opportunity for women to leverage mobile phones to access financial
services. Women entrepreneurs in rural Afghanistan now have the opportunity to use mobile
phones as a tool for economic and social development.
According to the Afghan Ministry of Communication, there are five mobile service
providers in the country: Afghan Wireless (AWCC), a partly state-owned company; Roshan (a
privately owned company), MTN Afghanistan and Etisalat (with parent companies located in the
Middle East), and African and Afghan Telecom (owned by the state). Due to this competitive
environment among mobile phone service providers, subscription fees have gone down by 70%
since 2003, making the technology more affordable to use (Bhatia & Gupta, 2006). Moreover,
according to USAID (2013):
Mobile phone costs in Afghanistan have dropped dramatically in the past decade. The
average Afghan makes US$543 per year, or US$45 per month. When mobile phones
were first introduced to the Afghan market, one SIM card and a mobile phone handset
together cost US$300. Today, a SIM card costs roughly US$1 and a previously owned
handset can be purchased for around US$10. Similarly, the cost of airtime has fallen
more than 500 percent since 2003 when one minute cost US$0.36 (18 Afs) – in late 2012,
one minute cost US$0.06 (3 Afs). (p. 5)
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What makes this extraordinary success in mobile usage in the country more relevant to
developmental policies is the unprecedented use of high-profile mobile programs and mobile
apps such as Mobile Money Transfer (MMT) and Interactive Voice Response (IVR) systems.
Although the use of these mobile programs and mobile apps is still in the infancy stage (with
limited offerings), such use is a most promising avenue for development in the country.
Himelfarb (2010) explained:
A staggering 97 percent of the population of Afghanistan is unbanked, and most
customers earn so little income that their business is of little interest to most commercial
banks. This leaves microfinance institutes and numerous informal lenders as the only
financial resources available to most Afghans. It is against this backdrop that MMT has
become one of the most exciting mobile applications in Afghanistan to date, with proven
value for not only facilitating economic development and commerce, but for helping to
curb corruption. (p. 6)
In 2008, Roshan introduced a highly successful MMT project called M-Paisa in partnership with
Vodafone. The system allows users to deposit and withdraw cash from mobile-based accounts, to
pay bills, to purchase goods with e-currency, and—most importantly—to transfer money
between users and merchants directly from their phones. According to this system, the user
receives an automatic SMS confirming the transaction and the amount exchanged after each
transaction.
By the end of March 2010, Roshan had over 130,000 M-Paisa customers, and reports
have indicated that they have added between 500 and 800 new M-Paisa customers daily since
April 2010. The most successful use of M-Paisa has been in the distribution of salaries to
members of the Afghan National Police and some Afghan National Army (ANA) personnel. M-
Paisa agents, as of 2010, were present in all 34 provinces in Afghanistan, offering unprecedented
access to money for both rural and urban residents (Wentz, Kramer, & Starr, 2008).
USE OF MOBILE TECHNOLOGY 82
The use of mobile phone and mobile phone applications in Afghanistan, and its
remarkable diffusion among women there, has created an opportunity to use this technology in
advancing women’s development in their country. The following chapter submits a working
model for this merger of mobile technology and human development theory, especially to
advance women’s development in Afghanistan. This model brings together (a) peer-to-peer
philanthropy, (b) mobile technology, and (c) mobile commerce, while relying on (d) women’s
capabilities in rural areas of Afghanistan. The underlying premise in this model is that mobile
technology for e-commerce can be incorporated as a powerful economic driver of social capital
among women’s social networks in rural villages in Afghanistan.
USE OF MOBILE TECHNOLOGY 83
CHAPTER SEVEN:
PEER-TO-PEER (P2P) E-PHILANTHROPY: PROMOTING DEVELOPMENT OF WOMEN
IN RURAL AFGHANISTAN VIA THE USE OF MOBILE TECHNOLOGY APPLICATIONS
Traditional philanthropy has always relied on nonprofit models of fundraising and charity
giving. Many nonprofit foundations have been designed around these models to address growing
social ills (such as global poverty, public health crises, and human rights abuses). But in the age
of information technology, new models of e-philanthropy have been developed that are
dramatically altering the way philanthropy operates. These new innovations can have
transformative effects in the way philanthropy is practiced, relying on the concept of “doing
good without handouts” (Shruti, 2008). Nowhere has this trend been more readily adopted than
at the corporate and business levels. These models in corporate philanthropy, which are
perceived to be socially responsible, often harness information technology and market
mechanisms to achieve their philanthropic aims.
Against this backdrop of information technology—and in combination with market
mechanisms and corporate philanthropy—this chapter introduces a new e-philanthropy model
that will advance individual capabilities, and empower people to directly advance their economic
well-being by participating in e-commerce via their mobile phones. This new philanthropic
model envisions individuals around the world using information technology devices, such as
smart phones, to tap into e-commerce platforms such as eBay to sell locally produced products
for the purpose of generating income for themselves and their families.
This model combines the power of individual capabilities, the use of social network
systems and social capital, the reach of corporate philanthropy (with its focus on social return),
the ever-growing arm of e-micro financing (and its success in mainstreaming social lending), and
USE OF MOBILE TECHNOLOGY 84
the advancement of e-commerce via smart phones, to economically empower individuals in the
world’s remote corners.
This chapter will introduce a business model whose objective is to exploit a business
opportunity by creating value both for individuals in need and the entities supporting
philanthropic causes. This model presents an active philanthropy whereby givers and receivers
benefit from the transaction, and individuals participate in improving their own economic well-
being, moving away from relying on nonprofit charity-based organizations sustained by
donations. This chapter introduces “Peer-2-Peer Entrepreneurial E-Philanthropy,” a business
model or business case for such a philanthropic system. This business model will also tell a
logical story of who the customers are, what they value, and how the benefits are distributed to
all parties involved in the philanthropical loop. It will examine the practical applications of this
business model by relating it to the economic conditions among women living in rural areas of
Afghanistan. The business model for this P2P entrepreneurial e-philanthropy envisions creating
networks of entrepreneur women in rural Afghanistan to actively participate in e-commerce with
the rest of the world using smart phones and e-commerce platforms.
The chapter begins by examining the current trends in e-philanthropy, both at the
corporate level and at the individual level, then presents evidence that social lending in the age of
Internet has proven to be an important part of the new trends in e-philanthropy. This chapter then
explores the role of e-commerce as a market-oriented mechanism in building e-philanthropy
platforms while explaining e-philanthropy through the prism of the new technological advances,
both in mobile technology and mobile banking. This chapter concludes by presenting a peer-to-
peer entrepreneurial e-philanthropy model to advance women’s development in rural
Afghanistan.
USE OF MOBILE TECHNOLOGY 85
The Google.org home page reads: “Google.org aspires to use the power of information to
help people better their lives.” This assertion describes a mission of philanthropy driven by
market mechanism and powered by information technology. Stephanie Strom (2006),
commenting on Google’s model, identified the marketplace as an important platform,
suggesting:
Google.org reflects the culture of the business that brought [its founders] their wealth:
information technology, with its ethos that everyone should have access to information.
By their way of thinking, the marketplace can have the same level the-playing field
impact, and supply the world’s poor with basic needs like food, sanitation and shelter.
Google.org introduced a new era of philanthropy called “for-profit philanthropy,” which is
designed more like a hybrid entity with charitable aims and for-profit status. The idea behind this
concept is to release Google from the restrictions associated with nonprofit status, and allow it to
obtain greater autonomy by concentrating on its philanthropy. The model is fueled by the idea
that “it’s good for people to make money doing philanthropy” (Google.com).
Many forms of this kind of philanthropy (with titles such as “venture philanthropy,”
“innovative philanthropy,” and “hybrid philanthropy”) are changing the face of traditional
nonprofit philanthropy. But a new breed of market-driven philanthropy, with such titles as
“philanthrepreneurship” (Branson, 2007) and “social entrepreneurship” (Dees, 2007), is
changing the way philanthropy is practiced. Here, the concept relies on incorporating business
principles for philanthropic aims. According to these new models of e-philanthropy, addressing
social causes will require entrepreneurs who can apply creative business principles to social
issues (Dees, 2007).
In exploring these models further, a new picture emerges in which individuals both on the
giving and the receiving end of philanthropic transactions may have “profit” motives (Dees,
2007). In such philanthropic activities, the sellers offer value in the form of products to remedy
USE OF MOBILE TECHNOLOGY 86
their societal and developmental needs, whereas the buyers purchase those products fulfilling
their consumer needs as well as satisfying their philanthropic mission.
Many traditional nonprofit organizations engage in for-profit activities such as selling
merchandise to raise money for their particular social causes. But what’s new here is the
immediacy of transactions through the Internet that enables individuals—not just
organizations—to reach out to each other through a market mechanism to advance their social
and economic well-being. Information technology platforms such as mobile phones, online e-
commerce sites, and social network sites become the catalyst in connecting individuals so that
they can be directly be involved in business transactions that provide value for all parties.
Ruminay (2007) has suggested, for example, that social lending (which has empowered
individuals throughout human history to borrow and lend to each other without using large
institutions, such as banks) is morphing into new models on the Internet.
Social Lending in the Age of Internet
Organizations such as Kiva.org, CircleLending.com, Zopa.com, and Prosper.com have
taken social lending to a new level whereby peer-to-peer (P2P) microcredit lending is readily
accessible on the Internet for a large number of people around the world. Also called the “e-Bays
for Loans,” these Internet-based companies use peer-to-peer (P2P) microcredit lending with the
understanding that it is not only convenient for borrowers and lenders, but also may be good
business.
These Internet-based social lending organizations function under two distinct business
models. Circle.com’s business model can be described as a known-to-known P2P lending model,
whereas Kiva.org’s business model is based on an unknown-to-unknown P2P lending model
(Ruminay, 2007).
USE OF MOBILE TECHNOLOGY 87
Kiva.org has developed a business model that is the essence of entrepreneurship in e-
philanthropy. According to this business model, instead of providing tax deductible donations,
Kiva.org users pledge interest-free loans. Kiva.org directs 100% of these pledges to borrowers in
developing countries through its partner PayPal, which offers participants free payment
processing transactions. Kiva.org functions more like a for-profit entity. As O’Brien (2008), has
explained:
And whereas charitable giving often resembles investing in a mutual fund, i.e. write a
check and let the experts do the work, Kiva treats lenders the way a full-service broker
services a big-money client, providing risk assessment upfront and a steady stream of
post-investment information. Every borrower has an associated risk rating. The number
of defaults sits out in the open (currently 1.14% of all loans), a few clicks from photos of
deadbeat borrowers. (p. 1)
For its part, Kiva.org describes itself in the following way:
We are a non-profit organization with a mission to connect people through lending to
alleviate poverty. Leveraging the internet and worldwide network of microfinance
institutions, Kiva lets individuals lend as little as $25 to help create opportunity around
the world. We envision a world where all people – even in the most remote areas of the
globe – hold the power to create opportunity for themselves and others. We believe
providing safe, affordable access to capital, to those in need, helps people create better
lives for themselves and their families.
In 2012, Kiva.org had over 749,000 small lenders with over $302 million dollars in loans in 60
different countries. Kiva’s business model, and its goal of empowering individuals by enabling
them to help themselves, is a way of promoting the advancement of individuals’ capabilities.
Kiva’s business model limits the size of individual loans to $25. At a $25 limit, almost any
person in the developed world can afford to participate, thus creating an army of donors. This
$25 cap on individual loans also attracts broad demographic participation among lenders (from
20-year-olds to senior citizens) due to its affordability. This business model offers an
opportunity for everyone to link with developing world entrepreneurs (be they farmers in
Uganda or women carpet weavers in Afghanistan).
USE OF MOBILE TECHNOLOGY 88
In recent years, many other on-line charities, such as Global Giving.org and Progreso
Financiero.org, using Internet platforms similar to Kiva.org, have been taking on social causes in
the ever-growing field of e-philanthropy. But a new donation-based Internet charity organization
called DonorsChoose.org, an education-oriented site founded by former Bronx high school
teacher Charles Best, may have found a business model that is more concentrated on social
causes, letting donor member’s effect change in very specific ways. In this model, the individual
make donations rather than loans, but he or she gets to choose the cause. O’Brien (2008)
explained:
For example, a biology teacher in Oregon submits a funding proposal for $703 to buy
chest-waders for high school students who operate a salmon hatchery on the Coquille
River. A prospective donor, concerned about both science education and salmon
depletion (like me), can search on “salmon” and fund the whole project or whatever he
can afford. DonorsChoose.org then buys the materials and ships them to the teacher. The
teacher and students, in turn, provide regular progress reports. (p. 2)
As Charles Best put it, “You could type in ‘hiking in the Sierras’ and get projects specific to that
area of interest” (O’Brien, 2008, p. 2).
To insure donors’ confidence in the company, Donorschoose.org explains its risk
management steps in insuring integrity on the company’s website:
Our team is vigilant about providing end-to-end integrity for each classroom project
funded through our site. To that end, we:
o Vet every classroom project request submitted by teachers.
o Process donor transactions using the most secure and trusted technology available.
o Purchase the classroom materials, shipping items directly to the school and alerting the
principal when the materials are on their way.
o Provide photos of the project taking place, teacher and student letters, and a cost report
showing how every dollar was spent. (DonorsChoose.org)
DonorsChoose.org seems to have the support of many corporate philanthropists, as its start-up
was facilitated by seed money of $14 million offered in the form of donations from eBay founder
Pierre Omidyar and Yahoo cofounder David Filo. DonorsChoose.org (as a charity organization)
USE OF MOBILE TECHNOLOGY 89
leverages the connectivity that the Internet offers to individuals, but its business model differs in
offering the opportunity to individual donors either to allocate 100% of a donation to a particular
project or to peel off 15% to cover overhead. According to O’Brien (2008), over 90% choose
the second option, which allows the organization the financial resources to expand.
The business model in both Kiva.org and DonorChoose.org provides connectivity on
equal footing between lenders and borrowers, or donors and receivers. Consider Elisabeth
Idnurm, a 30-year old investment banker in New York, who owns over 300 loans with Kiva.org.
Idnurm has offered, “The thing that brings me back is that one-on-one you get with
entrepreneurs” (O’Brien, 2008, p. 2). This kind of e-philanthropy, as explained by both
Kiva.org, and DonorChoose.org, seems to work because of the individual donor’s or lender’s
hands-on participation in the outcome of his or her philanthropic support.
Contrariwise, the business model of Zopa.com and Prosper.com is based on unknown-to-
unknown P2P lending, with a for-profit structure. Even though Zopa.com and Prospect.com are
for-profit organizations, examining their business model provides potential guidance for
developing similar business models to advance the concept of P2P Entrepreneurial e-
Philanthropy.
Zopa.com and Prosper.com are changing the face of traditional microfinance institutions
(MFI). These organizations are designed to bring microfinance lending to the individual level,
steering lending away from major institutions (such as banks and credit unions). Zopa.com, on
its website, explains its business model in the following way: “Zopa is a marketplace for money.
Lenders get lovely returns, Borrowers get low-cost loans and money becomes human again.” It
further explains, “At Zopa, people have spare money lend it directly to people who want to
borrow. There are no banks in the middle, no huge overheads and no sneaky fees, meaning
USE OF MOBILE TECHNOLOGY 90
everyone gets better rates.” Zopa.com’s website further explains its business model as operating
a “lending platform” only, and is not party to any “loan contract” between lenders and
borrowers—thus further shifting the paradigm of the traditional structural relationship between
institutions and their borrowers.
For both Zopa.com and Prosper.com, the business model is designed around individual-
to-individual transactions. Members register on the website, either as a lender or as a borrower.
The borrowers initiate the process by requesting loans with information about themselves and
their projects and how they would use the money. This process is more like the eBay system, in
which sellers describe products that they have offered for auction. On the other end, the lenders
choose these loans with the intention of maximizing their earned interest. Prosper.com calls itself
the “eBay for Loans.”
Importantly, both companies encourage borrowers to form groups based
on their common interest or affiliation, such as women basket weavers. Here, these groups of
borrowers select an individual to be responsible for all transactions as well as maintenance of the
loan and promotion and preservation of the group’s reputation. Ruminay (2007) explained that
the role of group leader is important because she is often accountable to collection agencies if
there are defaults in loans. He suggested that these individuals be compensated on a commission
basis as an incentive for taking on such responsibilities.
Earlier this chapter cited that corporate philanthropy makes up a significant portion of
charity support. Many socially conscious organizations, such as Google and eBay, have made it
their mission to support social causes through philanthropic giving. EBay, in particular, has been
at the forefront of supporting social causes, and has made corporate social responsibility an
integral part of its business model.
USE OF MOBILE TECHNOLOGY 91
In 2003, eBay, in partnership with the non-profit Point of Light Foundation and its
subsidiary MissionFish, launched Giving Works to support its philanthropic mission. At eBay’s
Giving Works site, sellers can donate a portion, or their entire auction proceeds, to charities.
According to the Giving Works guidelines presented on the eBay website, anyone can sell an
item on eBay and donate 10% to 100% of its final sale price (in 5% increments) to a nonprofit
organization listed among the accepted charities on the site. These nonprofit charities are vetted
by MissionFish to be included on the site. As such, the Giving Works business model allows
individuals to choose their charity and satisfy their philanthropic mission. According to the
information provided by MissionFish, sellers receive the full tax benefit of the donated charity
auction proceeds. According to Elfenbein and McManus, (2007), MissionFish’s business model
(as of September 13, 2006) required a deduction of $3 plus 2.9% of the donation amount as a fee.
This fee enabled Giving Works to distribute over 240 million dollars in charitable causes by
2006.
E-Commerce
The adaptation of a market-oriented mechanism in e-philanthropy has far-reaching
implications as a “disruptive innovation” in the way philanthropy is practiced. This model of
acquiring revenue from commercial activities enables individuals and nonprofit organizations to
utilize market-based resources to achieve their philanthropic goals (Gainer & Padanyi, 2005).
Disruptive innovation creates an entirely new market through the introduction of a new kind of
product or service (Christensen & Overdorf, 2000) and can fundamentally change the way
philanthropy is practiced through the use of Internet platforms of e-commerce, in general, and
through online auction service providers. These auction-based exchanges (offered through e-
commerce platforms such as eBay, uBid, Yahoo, Auctions, and Bidz) provide direct avenues for
USE OF MOBILE TECHNOLOGY 92
individuals around the world to participate in commerce in pursuit of philanthropic means.
Clearly, disruptive innovation in e-philanthropy has the potential to change philanthropic
activities from corporate-, business-, and even nonprofit-centered systems to individual-centered
systems. These sites offer buyers a virtual marketplace with a countless array of merchandise,
and give sellers a virtual “storefront,” where they can offer for sale almost everything in a
spatially limitless market (Chua & Berger, 2006). Relying on this market mechanism, a central
goal of this project is to provide a roadmap to philanthropy with the objective of creating a
business model that allows merchants (from developing countries, such as Afghanistan) to sell
their wares on the World Wide Web, using e-commerce platforms such as auction sites through
mobile devices.
E-commerce is often defined as the digital platforms that enable commercial transactions
between businesses and their customers. On an e-commerce platform, all transactions are
mediated by digital technology (Wigand, 1997), offering the ability to purchase and sell goods
via the Internet and providing a virtual marketplace for businesses and their customers. Today,
online retail companies (such as Amazon.com, eBay.com, and Google.com) dominate online
commerce activities, offering product and services to practically anyone around the globe on a
24-hours-a-day basis. Purchasers and sellers can be served at their homes.
Mobile Commerce
In recent years, as mobile technology has advanced, e-commerce has morphed into m-
commerce. Equipped with microbrowsers and other mobile applications, the new mobile
technologies, including smart phones (with the aid of Internet), offer consumers endless
possibilities to engaging in commerce, including banking, buying, and selling. M-commerce is
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the process of buying and selling goods and services, while making payment fulfillment easier
with the help of mobile phones.
M-commerce relies on customer or user interactions. m-commerce eliminates the need
for a stationary connection point (such as PC), thus making the accessibility constraints of the
Internet less important. M-commerce applications include:
o Multimedia Messaging Services (MMS)
o Mobile Instant Messaging (MIM)
o Mobile Financial Services (m-bank, m-money)
o Mobile shopping (m-auction, m-reservation)
E-commerce and mobile commerce are conducted either through business-to-business (B2B),
business-to-consumer (B2C), or consumer-to-consumer (C2C) transactions. To deploy this
approach, we follow the consumer-to-consumer aspect of e-commerce and m-commerce, by
exploring the business models of eBay and M-PESA, two very successful organizations in both
e-commerce and m-commerce sectors.
The eBay Way
In 1995, Pierre Omidyar, using emerging technologies, created one of the most successful
online businesses. This enterprise enabled individual buyers and sellers to come together to
exchange goods without traditional business playing the role of middleman. According to
Kashkooli (2006), Omidyar put together the expansive network possibilities of the Internet, using
the auction format to build a marketplace of buying and selling. In this marketplace, all users—
buyers and sellers—are on equal footing while allowing for the optimal allocation of resources
(Kashkooli, 2006). On its website, eBay posted the following statement:
With more than 100 million active users globally (as of Q4 2011), eBay is the world’s
largest online marketplace, where practically anyone can buy and sell practically
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anything. Founded in 1995, eBay connects a diverse and passionate community of
individual buyers and sellers, as well as small businesses. Their collective impact on
ecommerce is staggering: In 2011, the total value of goods sold on eBay was $68.6
billion—more than $2,100 every second.
EBay is, by far, one of the most successful business models to emerge from the dot-com era of
the 1990s. What is strikingly different about eBay’s business model is that it does not rely on the
traditional model of selling from a centralized source. Under eBay’s model, users operate on a
level playing field, with equal access to information on price and products. Any individual has
the opportunity to sell his or her products regardless of his/her size or assets. According to
Kashkooli (2006), in eBay’s business model, all buyers and sellers participate in exchanges
through an auction format that ultimately produces the perfect price—the exact point of supply
meeting demand.
Kashkooli (2006) further explained:,
Ebay’s success relied on solving certain fundamental problems of building a market:
reducing uncertainty and risk, minimizing information asymmetries, and ensuring and
enforcing property rights. The company also had to define notions of fair competition,
what the company and users often refer to as a “level playing field.” (p. 3)
EBay’s objective was to move commerce from a business-to-business model to a consumer-to-
consumer model by creating a venue for person-to-person engagement in commerce. As a result,
the eBay model offers several valuable propositions, such as:
o Universal access to information
o Shrinking geographic limitations in commerce
o Bringing people together who would not have been in contact through the power of
the Internet
o Diversification of product offerings
o Immediate payment transaction capabilities; and
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o Developing mechanisms for establishing trust
EBay also adopted a new system to accommodate small- and medium-sized businesses by
bringing in an entirely new seller category of eBay middlemen, that is, drop-off stores and
trading assistants, the introduction of eBay storefronts, and the growing use of the site by
traditional retailers such as Best Buy. The success that eBay has had as a global e-commerce
platform is due, in large part, to its ability to reduce risk and uncertainty, thus building trust
among its customers. Developing and securing a reliable method of online payment was critical
to eBay’s growth. In partnering with PayPal, the company was able to establish trust among its
customers, thereby expanding its market. The eBay business model also possessed many other
mechanisms such as feedback forum, user agreements, dispute resolution, and fraud alert,
enabling the organization to develop a high level of trust among its users (Kashkooli, 2006).
M-PESA
In 2007, Safaricom, Kenya’s largest mobile network operator, launched M-PESA, a
mobile payment service designed for the sector of Kenyan society that is out of the reach of the
regular banking system—a population that Hughes (2007) has called “unbanked.” Within the
first few months, Safaricom had registered over 20,000 M-PESA customers, ahead of its targeted
business plan (Hughes, 2007). The business model for M-PESA filled a gap in the financial
world for those who were considered unbanked due to either their remote living locations, being
unconnected, or often semiliterate. The model presented a mechanism for those individuals to
participate in financial transactions with the rest of the world using mobile technology.
According to Hughes (2007), the business model offers the opportunity for an M-PESA customer
to use his or her mobile phone to move money quickly, securely, and across great distances,
directly to another mobile phone user. The system allows customers to receive their salaries, pay
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bills, receive and repay microfinance loans, send and receive money, and purchase airtime
directly for their mobile phones. The important part of this business model is that the customers
do not need to have a bank account, but instead register with Safaricom for an M-PESA account,
through which they can receive money transfers from around the world directly on their mobile
phones. Customers turn cash into e-money at Safaricom dealers, and then follow simple
instructions on their phones to make payments through their M-PESA accounts; the system
provides money transfers just as banks do in the developed world (Hughes, 2007). This model is
a breakthrough innovation because it has the potential to change how general financial
transactions are processed globally, and in the developing world in particular. Access to finance
by individuals living in remote areas of the globe facilitates entrepreneurial activities, enabling
them to participate in economic development and creating wealth, jobs, and trades.
Hughes (2007) further explained:
Getting cash into the hands of people who can use it is limited on the supply-side rather
than demand-side; there is no shortage of funds, but it’s the ability to move money from
the sender to the receiver that is the stumbling block. Since the creation of money, the
ability to move it from A to B—the so called “velocity of money”—has been a
fundamental cornerstone of economic activities. But the issue is exactly how money
transfer is made to happen in an emerging market where the infrastructure is poorly
developed and where very few people have or even want bank accounts. (p. 65)
In Figure 2, below, the M-PESA’s model illustrates how money can transfer between accounts
and individuals.
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Figure 2. M-PESA model, innovation (2007).
The M-PESA business model relies on the following features:
o Specifically targets unbanked individuals in remote areas
o E-money must exactly match the actual currency value
o The consumer interface has to be a mobile phone (smart phone, SIM cards)
o Transactions are requested through a voice recognition apparatus or SMS (text
messaging)
o Finds customers with a real market need for financial transactions
In 2011, in an article in Slate.com, Zimmerman and Meinrath concluded that, even though the
cost of being an M-PESA subscriber was substantial for poor people, the real and potential
benefits of M-PESA (as a risk management and financial empowerment tool of the poor) was
significant. The authors suggested that the original intentions of M-PESA’s business model—to
reach the “unbanked”—was a success. According to Zimmerman and Meinrath (2011), in 2008,
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less than 20% of the population outside the capital living on less than $1.25 per day used M-
PESA, but by 2011 this share had steadily grown to 72%.
Peer-2-Peer Entrepreneurial E-Philanthropy
This project is designed to enable women in remote areas of Afghanistan to sell their
locally produced products in the global marketplace on e-commerce platforms such as eBay,
Yahoo, or Amazon via their smart phones. The unique value of this project is the opportunity for
these women to gain access to the global marketplace for their locally produced products, thus
satisfying their local development needs, and for the supporters to receive products in return,
satisfying their consumer needs and their philanthropy desires. This prototype brings individual
givers directly to the individual receivers in a P-2-P entrepreneur e-philanthropic loop.
The project envisions the funding for supplies to come directly from peer-2-peer loans or
donations from individuals around the globe (through their membership at e-microfinance sites
such as Kiva.org or eBay Givingworks). The project envisions that these direct transactions of
money will take place between individuals via mobile banking platforms such as M-PESA. The
development objective of this project is for women entrepreneurs in remote areas of Afghanistan
to generate around $25 monthly income.
Project Context
In the past few decades, women in Afghanistan have suffered tremendous hardship as the
result of armed conflict. They have been subjected to unspeakable atrocities, especially during
the Taliban reign. Any glimmer of hope for emancipation and empowerment was crushed
throughout these decades. The lack of social and economic freedom and opportunities left the
Afghan female population marginalized and vulnerable. Not until 2001 did the plight of Afghan
women came to light because the international community put in place a new set of political and
USE OF MOBILE TECHNOLOGY 99
economic policies for the country. But, for the most part, these policies are designed to lift the
country out of the hardships of war and poverty; little effort is applied to specifically addressing
the plight of the suffering female population. Often ignored when formulating development
policies is the reality that in rural Afghanistan women all too often are not treated as persons in
their own right, with dignity and deserving respect from laws and institutions. Instead, women
are treated as mere instruments for the ends of others (usually men) and not viewed as economic
agents.
Afghanistan is, by and large, an agricultural society, with over 85% of the country’s GNP
being produced agriculturally; 75% of the population lives in rural areas, where the economic
life is concentrated on the local community. The World Bank estimates that 80–90% of
Afghanistan economic activities occur in the informal sector, and almost all credit and other
financial transactions are carried in the informal sector. Because Afghanistan is predominately an
agricultural society, and husbandry of land and livestock has been a male-dominated
responsibility, women are left out of economic activities, thereby making them especially
vulnerable to the economic conditions of the country, as no effective public welfare institutions
exist.
Furthermore, because, for the most part, it relies on production in local communities, the
economic structure in Afghanistan forces families only to see family members in economic
terms. The fathers in the family value the arrival of male children because of their economic
contributions to the family. Boys are always considered assets. Women are disadvantaged in
Afghan society from the moment of their birth. Girls are liabilities because they are considered
economic consumers rather than producers. Since 2001, a market-driven economy has been
USE OF MOBILE TECHNOLOGY 100
displacing the local economy. But the women always bear the brunt of economic hardship
because they are considered—first and foremost—economic liabilities.
This project presenting an opportunity to remedy this condition by providing women in
the rural areas of Afghanistan tools to become economic producers through the use of
information technology platforms, specifically mobile technology, Internet technology, and web
commerce platforms. This aim aligns with the project’s broader theme of advancing women’s
capabilities in the context of development theories. Underscoring the importance of this effort for
women’s development in Afghanistan, this project considers the following as baseline statistics
that show the levels of human development among the broader population, in general, and the
female population, in particular:
• In 2011, per capita income in Afghanistan was around $300
• Afghanistan ranks fifth lowest in the world in Human Development Index, with 0.346
out of 1000; its Gender Development Index ranks third lowest in the world (Abirafeh,
2009).
• Only 242 women-owned companies are registered in Afghanistan’s national database
of 7,000 Afghan-owned companies (Sultan, 2005).
Mobile Phone Application for Development for Women in Remote Areas of Afghanistan
To advance women’s development in rural Afghanistan, this section presents a model
project designed to use mobile technology for women’s development. The model envisions
creating networks of five to 10 women in designated remote villages in Afghanistan. Networks
would be managed and administered by a single woman chosen from the village. Each woman
would be given a smart phone, with a voice recognition apparatus to secure individual identity
for the device, and be capable of accessing the Internet. The administrator will also be equipped
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with a single smart phone capable of accessing the worldwide web. The women would be given
the task of producing indigenous products, such as carpets, embroideries, pottery, and jewelry.
The administrators would be given the responsibility of production management or data
management for the purpose of making these products available to global market. The loop of
entrepreneurial e-philanthropy would be as follows:
1. The women in each network produce products.
2. The administrator creates images of the products via smart phone camera apparatus.
3. The administrator assigns descriptions and codes to the individuals and products for
placement on eBay, Amazon, or Yahoo.
4. The administrator is responsible for shipping and handling the products.
5. The remittance from the product sales are directly deposited as e-money to each
women’s smart phone via PayPal and M-PESA.
6. The administrator secures e-microfinance loans or donations for supplies needed to
produce these products from social lending Internet sites such as Kiva.org and eBay
GivingWorks.
7. The administrator of each network presents the women in her network through a
Facebook page to donors and lenders on Kiva.org and GivingWorks.
Project Technical Structure
To connect women from remote areas of Afghanistan to greater global e-commerce, this
project envisions the use of available technological devices such as mobile phones, and requires
agreements with a network of partners in e-commerce to create value in this P2P entrepreneur e-
philanthropy. To execute this business model, the following requirements are identified:
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1. Women in the network and their administrator must receive a smart phone capable of
(a) Internet browsing, (b) taking photos, (c) texting, (d) instant messaging, and (e)
voice security identification.
2. Women in each network will be identified and promoted (their photo need not
appear) with their network Facebook page available for access by Internet users
worldwide. The Facebook page will be updated by the administrator. The page can
be used for production schedule, shipping information, and social networking.
3. The administrator will (a) develop pictures and (b) written descriptions of products
produced by each individual (or collectively by the network), (c) assign codes to
those products, and (d) upload product pictures and descriptions for auction on
partner network websites such as eBay, Yahoo, Amazon, etc.
4. After products are sold, partner networks would transfer payment via PayPal to
mobile banking systems, such as M-PESA (with product codes and individual codes).
5. M-PESA, in return, would credit e-money directly to mobile devices used by women
whose products were sold in auction.
6. The administrators also develop packages with compelling stories about each woman
to be placed in e- social lending sites (such as Kiva.org. or GivingWroks.com) for the
purpose of securing loans or donations to be used for production supplies. With
Kiva.org and GivingWorks, the opportunity should be extended to their members to
communicate directly with women’s networks through their administrator. Email or
text communication (through the worldwide web) would be encouraged. The loan or
donation should be processed through mobile banking systems, such as M-PESA, and
should be directly credited to the administrator’s mobile account.
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7. The administrator’s compensation should be designed as a commission-based
structure so it can provide monetary incentives to make sure that the production cycle
and product purchase fulfillment is achieved.
Figure 3. Technical structure P2P entrepreneurial and philanthropy.
Project Scope
Approximately 10 villages will participate in this pilot project with the goal of creating a
network of 100 women. Each woman will be able to produce as much as $25 dollar per month in
revenue by participating in these network systems for a sustained period of six months.
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Stakeholders
The primary parties to be targeted in this project include rural families, specifically rural
women. Other stakeholders could include economic development agencies, governmental
development agencies, women’s rights agencies, technological and business development
groups, business investment groups, business entrepreneurs, and network partners such as e-Bay
and Kiva.org.
Strategic Alignment
The project envisions the development of a pilot program and its implementation as a
case study at the village level in Afghanistan. The projects requires building cross-partnership
with e-commerce vendors (such as eBay, Yahoo, and Amazon), and social lending sites such as
Kiva, and mobile banking networks such as M-PESA, or Vodaphone and Roshan in Afghanistan.
Project Limitations and Risks
Smart phones and e-commerce platforms have the potential to provide necessary
financial freedom and sustainable income sources for women in rural Afghanistan to develop
their entrepreneurial independence. However, a major obstacle may be that the lack of education
among women in the rural area Afghanistan (where 75% of the female population is illiterate),
impact their use of the smart phone. One promising solution in place already (by Roshan,
Afghanistan’s mobile service providers) is Interactive Voice Response (IVR) technology. IVR
allows customers to access Roshan’s database via a smart phone through speech recognition.
Women can be identified in the system through their voice for m-money transactions. Similar
systems are currently in place in many other developing countries. Pakistan’s mobile network,
Telenor, has had success engaging female customers through its IVR system (GSMA
Development Fund, 2011).
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Another limitation to fulfilling this model is the cost of providing smart phones to women
and their administrators in the remote areas of Afghanistan. A collaboration between Roshan
mobile network’s “Roshan’s 600” and USAID, called “Women Public Call Officer” (WPCO),
features female aid officers who are trained to help Afghan women secure microfinance loans
through FirstMicroFinanceBank Afghanistan (FMFB-A). These officers are given a business
start-up kit that includes the following: mobile phone, handset, SIM card, antenna, charger, and
12,500 units of talk time (Roshan, 2004). These women officers receive commissions by signing
up women for the program—thus teaching women entrepreneurs how to operate a business.
Roshan 600 could be easily replicated through and with women administrators as envisioned by
this business model.
A third important limitation that this business model would have to overcome is in the
area of product development. Goods that are produced locally must be merchandisable in the
international e-commerce arena. An ideal source to develop a partnership with is Afghanistan
Women’s Business Federation (AWBF). AWBF was established in 2005 in partnership with
USAID to serve as a capacity builder for businesses owned by women in Afghanistan. AWBF
offers training for women business entrepreneurs in the areas of business management,
marketing, finance, and technical skills. With the help of AWBF, these women’s networks can
identify and develop such local products as handicrafts, embroideries, carpet, clothing, jewelry,
agricultural products (fruits and nuts), and even service-oriented opportunities (such as call
centers) to be presented at auction sites.
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CHAPTER EIGHT:
CONCLUSION
A women seamstress in a remote village of Afghanistan uses her mobile phone to obtain
a microfinance loan provided through a mobile financial service, enabling her to purchase a
brand new sewing machine. Empowered by this new sewing machine, she reaches out to other
women in her village and employs them to produce additional garments for sale. This act, in
turn, helps her and her fellow women in the village generate additional income that provides for
their families, relieving all of the women involved from reliance on assistance from aid
organizations or governmental institutions. She is using her capabilities to advance her children’s
and her family’s well-being while breaking the cycle of generational poverty in her family
(Forbes.com, 2013). An Afghan police officer in the outskirt of Kabul checks out his Nokia 1011
mobile phone to verify that his monthly salary has been transferred to his “mobile” wallet, and
then, in an instant, texts a sum of money to his wife’s mobile phone in a remote area of
Afghanistan so that she may purchase groceries and other household essentials (Time.com,
2013).
These are not mere stories to be casually told, but events that are happening on a regular
basis in the lives of many Afghans—even in remote areas of the country. One might ask, then.
how can this be possible in a country where over 70% of the population is illiterate? As an article
in the March 2013 edition of Time.com explained:
In the eyes of the rest of the world, war-torn Afghanistan is a place with beaten-down
infrastructure, the minimum of modern amenities and, certainly, none of the services
made possible by the latest technological advances powering the Internet, financial
services and telecommunications. Surprisingly, however, Afghanistan is on the leading
edge of the mobile-money and banking revolution sweeping through developing
countries from Kenya to Indonesia.
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Today, in Afghanistan, mobile phone service functionality has grown from simple mobile
banking to mobile peer-2-peer transfers, point-of-sale merchant payments, and microfinance loan
disbursements and repayments.
Afghanistan’s leading telecom provider, Roshan, is redefining the way businesses look at
the poor and illiterate, providing these populations the technical means to advance their
capabilities, while nurturing their participation in economic activities as customers and
entrepreneurs. In Forbes.com in May 2013, Karim Khoja, Roshan’s chief executive officer
explained this phenomenon thusly:
Roshan is part of a new generation of companies that are redefining the concept of social
enterprise in emerging markets. This approach derives from our majority investor, the
Aga Khan Fund for Economic Development (AKFED), which fosters entrepreneurship
and builds economically sound enterprises in the developing world. We are pioneering a
business model in Afghanistan that breaks down the traditional distinctions between
profit and non-profit and between social contribution and commercial success. Tapping
the tremendous economic potential in emerging markets, such as Afghanistan, requires
companies to jettison the old paradigms of corporate philanthropy and social
responsibility, where social benefit is often disconnected from commercial operations and
realities. If the goal is both social impact and profit, then they are inseparable.
He further stated, “Mobile products and services are creating an ecosystem that supports public
institutions and helps entrepreneurs build new businesses.” Elsewhere, Hart and Christensen
(2002) suggested:
Companies can generate growth, and satisfy social and environmental stakeholders,
through a “great leap” to the base of the economic pyramid, where 4 billion people aspire
to join the economy for the first time. This is not a matter of simply of doing the right
thing in order to lift people out of poverty; it’s a matter of finding the most important
growth market of the future. (p. 51)
According to Time.com (2013), in 2012, Western Union signed an agreement with Roshan to
enable international money transfers to be sent directly to M-Paisa (Afghanistan’s version of M-
PESA). This was a joint mobile money transfer venture between Afghanistan’s biggest telecom
provider and British Vodafone, which services mobile subscribers in Afghanistan. This
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agreement was, by far, the most important development in the use of mobile technology to date.
Equipped with a mobile phone, and able to have international money transferred directly to their
mobile phone, Afghans from any socioeconomic background, with-or-without education, could
now tap into worldwide e-commerce.
Laurence Chandy, a development analyst at Brookings Institute in Washington, DC, sees
M-Paisa as an important catalyst in development, suggesting, “It fundamentally changes what it
means to be poor” (Time.com, 2013). Chandy further remarked, “Thanks to the intersection
between mobile phones with financial services in recent years, the world’s poor has a new ladder
up to increased prosperity and financial stability” (Time.com, 2013).
M-Paisa can create the opportunity for loans and charity giving to blossom on a global
scale, creating an ecosystem of development that allow individuals to participate in a system of
peer-2-peer philanthropy. But this all happens only if we look at the capabilities of the poor and
illiterate individuals in a whole new way.
For far too long, development theories were mostly founded on the premises that
economic development and literacy aptitude were the only conduits to human development and
human well-being. Human progress has been measured by degrees of economic development in
terms of broad economic indicators of GDP and by market-driven factors of free trade and free
capital. The merger of development with an emphasis on capabilities, advocated by scholars such
as Amartya Sen, Martha Nussbaum, and Jeffrey Sachs, has shifted the focus from a rigid
orthodoxy of development policies to human capabilities and human agency.
This dissertation has considered how the shift of development theory to focus on human
capabilities and human agency in achieving human basic needs and well-being has become the
cornerstone of development. It has also taken this shifting paradigm one step further by
USE OF MOBILE TECHNOLOGY 109
suggesting that development, in terms of empowerment in human capabilities, can best be
realized through advancements in mobile broadband and high-speed access to the Internet and
data services. As has been suggested, mobile phone technology and mobile applications can
support a paradigm shift in development as part of the broader use of information and
communication technology for international development. This new mobile revolution is
empowering individuals as never before possible—even in remote areas of developing
countries—to exercise their capabilities by participating in economic activities.
This transformation to mobile use among women in rural areas of Afghanistan has
opened an important window of opportunity for them to advance their economic well-being by
participating in broader e-commerce activities with the rest of world. The development project
articulated in these pages can alter the way we approach development theory—and the way we
look at the capabilities of poor and illiterate populations around the globe.
Project Implementation
Many of the most successful mobile-based development programs in developing
countries, such as Safaricom’s M-PESA in Kenya and Roshan’s M-PAISA in Afghanistan, rely
on local mobile money transfers between peer-to peer, business to individuals, and vice-versa.
These programs are, for the most part, designed to bring mobile banking to the “unbanked”
among the poorer populations. An important feature of these systems is that the airtime itself
functions as a form of cash. In these mobile-based companies, airtime has the precise value
equal to local currency. Imagine if a woman in some remote area of Afghanistan needs to send
money to her mother, who lives in another village that’s located hours away. The easiest way for
her to send money is to buy airtime, via her mobile phone, in her village directly from the mobile
phone providers such as Roshan. Instead of topping her prepaid mobile service in this
USE OF MOBILE TECHNOLOGY 110
transaction, she tops up her mother’s account. For a small fee to the mobile company, her mother
can now go and cash out this airtime with an agent of the mobile company. Women in
Bangladesh similarly use an airtime cash system in their transactions through Grameen Telecom.
This model also works in transactions among buyers and merchants. This airtime for cash system
has had the most diffusion among populations in both in Kenya and Afghanistan. In San
Francisco, for example, we might pay our cab driver via his Square (https://squareup.com), but
in Kabul we would send him some airtime. In Afghanistan, salaries of the Afghan National
Army are provided via mobile currency that can be used in similar cash transactions.
This project is designed to incorporate elements of airtime for cash in all transactions:
peer-to-peer, individual-to-business, and business-to-business. In conversations with Roshan in
Kabul, I discovered that, with partnership with their mobile network, such airtime cash system
could be expanded via their global partnership with M-PESA system. I envision that the products
and services sold on behalf of women in the remote villages of Afghanistan can be transferred,
via Roshan mobile network, to airtime cash currency that can then be exchanged for local
currency by Roshan’s representative.
In research conversations with eBay executives, I found it reassuring that a mobile
telecom company could function as a middleman in the loop of product and payment fulfillment.
This model initially will rely on creating a loop of product and payment fulfillment via eBay,
PayPal, and Roshan M-PAISA mobile networks. The benefits of creating a completely new
customer base for many of these companies are compelling, and a new symbiosis fits neatly in
the theory that these businesses have the most potential in business development by reaching
these customers.
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In the long term, this project has a potential for a two-way trade system via mobile
networks between individuals and groups. I envision that many villages in Afghanistan would
use such networks for buying and selling products, not just internationally but also trading
commodities and services among themselves. This project may be seen as a small first step to
increasing human capital in social networks while advancing regional economic performance
and improving quality of life overall.
Project’s Next Steps
The project envisions launching a dedicated website tentatively called “It Takes a
Village” that will solicit philanthropic support from individuals around the world. The premise
of the website is designed for individuals around the world to “adopt” a village in Afghanistan
through mobile connections. These international individuals can be, in many ways, responsible
for creating funding through their own resources or networks of friends and colleagues. These
world-wide participants, in the spirit of true peer-to-peer philanthropy, will be given the task of
supporting a network of women in a village in Afghanistan who can become purveyors of
products for worldwide consumption.
All transactions will follow a nonprofit model by relying on the philanthropic motives of
participants. The website business model will be designed to monitor and provide support to
international supporters as they embark on their philanthropic mission. The site will provide a
mechanism for monitoring to prevent fraud and abuse by individuals participating in this peer-to-
peer philanthropic loop.
The site will partner with such online philanthropic organizations such as Kiva.org, eBay,
and PayPal to create this chain of production and services. The site can also provide
opportunities for both ends of the customer base to interact in transactions, such as selling and
USE OF MOBILE TECHNOLOGY 112
buying merchandise, or providing call center support. The site will function as a marketing
vehicle for directing potential customers to mobile phone networks in the villages in
Afghanistan. The website will also function as a center to connect mobile networks within each
remote village and villages in other localities. The following four steps must be undertaken to
make sure the project is practically applied.
In Academia
In August 2104, I will visit Afghanistan on a preliminary fact finding mission. I will
present the project to professors at Kabul University, Afghanistan’s largest public university, and
to professors at the American University of Afghanistan, a private, nonprofit university. I will
discuss the feasibility of either or both of universities implementing a research project in
conjunction with this project. A preliminary telephone discussion with one professor at the
American University intimated possible interest in developing a joint research project. Funding
for the project can be solicited from either private foundations or from a United Nations
Development Programme (UNDP) in collaboration with for-profit businesses, especially mobile
telecom companies such as Roshan in Kabul.
In Nonprofit
In conversation with a representative from The Tiziano Project, a nonprofit foundation, I
discovered their mission: to provide equipment and training to individuals in conflict and
postconflict regions and to report their stories—which are akin to our efforts to help promote
women’s development in Afghanistan through mobile technology. Because, at the time of this
project, The Tiziano Project is working on projects in Afghanistan, I believe that a partnership
would be well suited in proceeding with our Afghan Women’s project. I am currently in
discussion to find common causes in looking at such partnerships. Also, discussions are on an
USE OF MOBILE TECHNOLOGY 113
ongoing basis with the representative of another nonprofit foundation from Afghanistan called
Razia’s Ray of Hope Foundation (an organization that supports building schools for girls in
Afghanistan) to look into working together. For this project’s implementation in Afghanistan, I
will be requesting support in the form of a grant or partnership with the Mavis Feminist Majority
Foundation Campaign for Afghan Women and Girls. The project will partner with the foundation
by tapping into their expertise in developing crafts made by Afghan women as they are displayed
on their website (http://www.femist.rog/afgan/index.as)p.
In the United Nation’s Development Programmes
This project will be submitted to the United Nations Development Programme (UNDP)
to solicit funding and seek its expertise in putting this project in widespread practice in
Afghanistan. Since 2002, UNDP has been active in 34 provinces across Afghanistan, completing
2,300 rural infrastructure projects that are benefiting 14 million Afghans. The most compelling
argument in favor of partnering with UNPD on this project is UNDP’s focus on women’s issues.
In the past decade, UNDP has funded many projects, promoting literacy and alleviating poverty
among women. UNDP has already put into place many projects to advance women’s
empowerment, including building a female police force that has already recruited over 1,500
female police officers. Partnership with UNPD will be an ideal next step in putting this project to
practice in Afghanistan. A grant proposal will be submitted to UNDP for this project.
UNICEF has also leveraged mobile phones for development programs in 190 countries
and territories around the world. According to Techcrunch.com (2012), the programs use mobile
phones as part development programs such as infant HIV testing, water sanitation, and a variety
of other health promoting programs. A grant request will be submitted to UNICEF for this
project.
USE OF MOBILE TECHNOLOGY 114
In Corporate Partnership
A partnership with eBay and Kiva.org, and a number of mobile providers in Afghanistan,
will be the ideal corporate support in launching this project in Afghanistan. The project will seek
partnership with Roshan in Afghanistan using their mobile network system and seek funding
from mobile device makers, such as Nokia and Apple, in providing mobile phones as part of the
grant to support this women’s empowerment project.
Looking Forward
In looking forward, many other technological innovations, such as the current online
peer-to-peer currency “Bitcoin,” have the potential to advance development through more
personal levels of peer-to-peer exchange and can be instrumental in advancing this project
globally. Digital currency that uses cryptography with scripting language will make these
exchanges more secure and less problematical, and will empower individuals around the world to
personally become involved in the well-being of their fellow world citizens by maximizing all of
our capabilities in development.
USE OF MOBILE TECHNOLOGY 115
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Abstract (if available)
Abstract
A mobile phone revolution is empowering individuals, whether poor or illiterate, to exercise their capabilities by participating in economic activities at levels unimaginable only a decade ago. The merger of development theory with capabilities, freedom, and human rights, offers the most significant change in human development and presents an opportunity to look at mobile phones as powerful instruments of development in this context. Nowhere is this transformation to mobile use more visible and far reaching than among the women of Afghanistan. A project designed as a platform featuring mobile technology for women's development in rural Afghanistan is presented herewith.
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Shefa, Abdullah
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The use of mobile technology and mobile applications as the next paradigm in development: can it be a game-changer in development for women in rural Afghanistan?
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