Stay in any business long enough, particularly a growing one, and it’s easy to start thinking that your product or service is the key to human happiness. Automobiles in the early days were going to bring about freedom and the perfection of democracy. Pesticides would eradicate global hunger. Electricity from nuclear power was going to be too cheap to meter.
And let’s face it, we in mobile communications are the same way. Just put enough phones in enough hands and markets will become efficient, families will stay connected, dictatorships will topple, and the Age of Aquarius will finally dawn.
Looking at the developing world it is particularly easy to fall into this mindset: having a mobile phone really can make a tremendous difference in quality of life. But hold on a minute, says ”Mobile Phones and Economic Development in Africa,” a forthcoming study by economists Jenny Aker of Tufts and Isaac Mbiti of Southern Methodist University. Before we assume that m-development, m-health, m-whatever is the only sensible thing to promote, let’s take a cold-eyed look at the evidence.
- Studies that have produced much cited relationships between mobile penetration and GDP growth – e.g. a 10% increase in mobile penetration is associated with a 0.6% increase in growth rate – do not credibly establish that mobile penetration causes GDP growth, only that the two are associated. They may both be results of some other cause, or the relationship could be reversed: make a country richer and more people are likely to have mobile phones.
- The use of mobile phones by NGOs to distribute cash is appealing and reduces the NGO’s overhead, but may transfer risk and cost to the beneficiary by forcing them to travel to a retail agent to get their cash.
- According to a 2009 FinAcess study they cite, M-Pesa does not primarily serve the unbanked, as 72% of users have a bank account.
Aker and Mbiti are certainly not arguing against encouraging mobile phone use in Africa, only against the idea that it is “the ‘silver bullet’ for development in sub-Saharan Africa.” It doesn’t benefit a millet farmer much to know the price of grain in a market to which there is no decent road.