Gabriel Dillon's Weblog


Jun 11 2009

Time Banks and Rural Communities

Time banking systems possess the potential to be more effective in the sparsely populated networks of rural communities than the thicker, more developed networks of urban environments.  In many ways, a time bank development project would seek to pattern its own implementation on the ways in which rural communities are already creating wealth: through the sharing of resources, the development of multiple kinds of expertise, and the cultivation of weak ties throughout a locality.  A new time bank would need to capitalize on these existing social systems to achieve successful adoption and diffusion.

Described very briefly, time banks are alternative currency systems that value goods and services by the amount of time invested in the commodity’s creation.  Participants accrue credit by producing materials for other participants in the system.  A time bank is not based on barter, in which a particular good is exchanged for another, rather it is designed to normalize the value of each participant’s contributions to the system according to their time spent.  An hour’s worth of baking a cake is valued the same as an hour of child care, or an hour of auto repair.  Time banks have been implemented in a number of different types of communities, but I believe they are most well-suited to rural communities based around small population centers.  These types of communities already possess a number of characteristics conducive to the widespread adoption and diffusion of the time banking system.

While Garcia (2006) is interested in rural communities’ survival on a world stage, focusing primarily on the role they might play in competing within much larger economies than their local one, a time bank system is primarily interested in creating wealth within the local economy.  As such, it relies very heavily on the type of social connections already in place within a small community.  Some characteristics of these connections include:

  • Social connections in the style of weak ties, that extend beyond homophylic relationships, for in rural communities, expertise might be more sparsely located and individually possessed.
  • Shared and universally recognizable opinion leaders, individuals who have many ties to many areas of a rural community have significantly more proportional influence on the rural community than even the most significant node within an urban social network.
  • Established non-monetary systems of exchange, such as networks of friends who already exchange pots of soup for help removing dead trees.

Additionally, time banks are particularly potent solutions for problems that afflict rural areas.  Especially in current times, as wallets are pinched and credit becomes more difficult to attain, rural communities might be particularly well served by non-monetary systems of exchange that value effort, time, and expertise over stable employment or prudent financial habits of years gone by.

In implementing a new time bank system, I would advise a development strategist to identify some existing social connections that are similar to those that would be present in a successful, sustainable time bank.   Examples include, groups of people, like church groups or existing cooperatives, which come together in times of duress, new businesses that are seeking to attract clientele, individuals who, because of some exogenous pressure, might look for other ways of slimming their monthly or weekly financial burden.  Each of these communities most likely shares individuals, some of whom may be recruited for roles as change agents.  These ambassadors of the system might be able to present the time bank to his or her peers as simply a more efficient way of doing what is already common in their communities.  Care would need to be taken that the diffusion of the community was not restricted to certain strata of the network, though that is an issue to be taken up at length in the near future.

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Jun 02 2009

Vague Trajectories: A question of causality

Path dependency’s vague trajectories trace the historical source of our current institutions and suggest our future options are limited.  Studying institutions with regard to their path dependency suggests to me a very time-delineated methodology; obsessed with the fourth dimension, such study seeks to identify causality and see the future as constrained by the status of the present.  It strikes me as a safe perspective of the world because what else can we do when Punctuated Disequilibrium showers us with lemons than make lemonade?  But viewing our telos as one “future that year by year recedes before us” belies the cyclical nature in which our institutionalized lives reinforce our current and future state of being.

The severity of the recent financial tumult is not yet apparent, but it seems to have shaken a great deal of worry into the global economic community.  The many years leading to the recent sub-prime mortgage crisis were chock full of events and factors that made such an unfortunate outcome unavoidable to a certain extent.  Yet, in trying to conclusively identify which factors—structural or cultural—contributed the most to our current dire state, we find ourselves in, as Putnam describes, a fruitless debate about chickens and eggs (p. 181).  One might identify the structure of the derivatives markets that sunk the banks as the prime factor, while another might say the erosion of trust relationships between banks and debtors resulted in overly opportunistic lending practices.  Yet another might lay blame on the feet of the governance systems and their interactions with the financial industries and government-sponsored enterprises.  The list can go on and on, but the fact of the matter remains the same: each of these descriptions elucidate but one example of the formal or informal institutions that constitute our present mortgage-related woes.

Incremental change occurs and we find ourselves slowly evolving along our determined trajectory.  Yet, I submit that the changes we perceive are much weaker than the systems that reinforce our status quo.  To continue with my example, despite the ‘crisis’ at hand, AIG still saw fit to proceed with business as usual when it honored its contracts by awarding retention bonuses.  And, despite a renewed awareness of debt culture, new legislation regarding credit cards includes provisions that will preserve the profitable bottom line of the card issuing companies.  As Putnam observed, where civic involvement, equality and democratic values flourish, so too will institutions that support, wait for it: civic involvement, equality and democratic values (p. 132).  The institutionalized practices, structures and relationships that were slowly assembled with the mortgage crisis as their telos will be even more slowly dismantled.

The institutions that structure our actions and the structures that affect our institutions are, by definition, involved in a state of cyclical co-dependence that provides society with stability.  Here, in the United States, it’s one of general prosperity scarred with vast economic inequality.  Other parts of the world experience their own stable orbits: war in the middle east, poverty in Sub-Saharan Africa.  Changing these things is possible, but doing so means breaking cycles that have years of closely interconnected cultural and structural reinforcement systems.  The institutional roots of a society’s status quo run deep and while the future is mutable, each root holds fast to the ground in which it has grown.  Likewise, that ground holds the root.

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Jun 01 2009

Douglass North and Educating About Institutional Change

Douglass North’s big shift from discussing economic development and change in terms of ownership and legal definitions of property rights came during a time when many development theorists were engaged in a bout of collective head scratching.  Focus on financial policy, legal frameworks and economic fundamentals repeatedly failed to improve economic performance in impoverished economies.  Faced with a broken “rational choice” model of economic growth, North found other forces that determine the acts of individuals and organizations.  He describes ‘institutions’ as the rule sets by which we limit our potential choices, thereby guiding the decisions which constitute the economic choices of a people.  Unfortunately, institutions are the work of human hands and their greedy little hearts and, therefore, subject to the whims of the powerful.

The crafting of salubrious, future-viable institutions is a really, really old human activity.  Plato did it, the American Constitutional Congress did it, dictators throughout the ages have tried to do so in particularly self-serving ways.  It is a bit disheartening that, when applied to economic environments, as opposed to political or cultural ones, the relevant parties gawk in shock at their looming paradigm shift.  This surprise is the result of a longstanding delusion among the dismal scientists that the numerical minutia they pour over reflect hard truths, that their divinations are based on proofs, rather than glimpsed through the hazy smoke and mirrors of the human psyche.  North is not wrong.  But he is still mired in a perspective that thinks transaction costs are the fundamental variable that needs to be tweaked to produce change.

Recent history has shown than the remaking of institutions is particularly thorny.  Lopping off the head of a government, gutting a military, and shelving a dominant political group, believe it or not, does not clear the slate for a sudden influx of sound, egalitarian institutional development practices.  North’s emphasis on path-dependent incremental change is appropriate, but it still emphasizes a top-down approach toward remaking the world.  My (most likely overly simplified) understanding of his treatise characterizes his program as one where the incentivization occurs on a structural level—one in which systems of limits can be assembled and implemented to slowly affect the formal and informal modes of interaction and exchange.  Even when discussing ideas and ideology, he suggests formal institutions, such as voting systems  as mechanisms for empowerment (p. 111).  Yet, he also recognizes that equal, low-cost transactions cannot occur in a system that lacks equal access to information.  How, then, does a voting system support the empowerment of the disenfranchised when disenfranchisement occurs on a significantly more fundamental level than that of voting?

I strongly agree that the decisions and actions of individuals and their agglomerations constitute the folds and stitches that hold together the fabrics of society.   For that reason, I believe the most important consideration in implementing a development policy must be the education of all those affected by the policy.  People – individuals on an individual basis – must understand what about the system of formal restraints and their enforcement might change as a result of the implemented policy.  It cannot be left up to a sensationalist media to cover a banking crisis, or to a corrupt government to implement voter reform.  There must be substantial, unbiased and pervasive educational efforts that describe in simple terms the purpose and potential ramifications of any change.  This is obviously very challenging in underdeveloped areas of the world, but it doesn’t minimize its importance.  USAID, the World Bank, even the IMF, need a pedagogy that includes the lowly denizens of the intended populations as well as the targeted institutions.

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May 28 2009

Global Value Chains and Catvocacy: Making progress toward solid slumber and international prosperity, one Smoochums at a time.

Globalized economies impose on many industries a variety of opportunities and obstacles.  Efficiencies created by the global resource market, both resources from which to create products as well as the global demand for such products, have challenged acceptable business models throughout the world.  However, the development of an industry that uniquely leverages the strengths of both a globalized economy and stimulates the development of strong, multi-faceted local economies might inspire world-wide economic development with fewer negative externalities than an effort to adapt an existing industry to global competition.  With that goal in mind, I strongly advocate the adoption of domestic cats as night-time head support systems and intend in the following paragraphs to demonstrate the viability of the product model and describe some ways in which an industry oriented toward the development and implementation of cat pillows might participate in local and global economies.

Continue Reading »

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May 28 2009

Agglomeration and Emergent Architectures

The economies of agglomeration give value to certain kinds of relationships in the networks that cumulatively constitute “economic development.”  If economic development is a multi-striated network in which financial, cultural, institutional, nodes are connected to each other through subtle ways in which efficiency, access and ease are maximized, then I might suggest that the path toward greater development mirrors similar paths that we use to maximize other, less complicated things.

The area between Dupont Circle, Adams Morgan and Columbia Heights is one of the more popular areas to experience the District’s nightlife.  There are a number of factors that facilitate the existence of these boisterous neighborhoods: geographic centrality, access via major transportation hubs, historical precedents, and a number of economic incentives for businesses to work together to create the party-time atmosphere.  And these are but to name a very few of the many interactions that create a ‘hot spot.’  They represent economies of agglomeration – businesses benefit from the commercial activity overflowing from their neighbors, the city government centralizes police efforts and late-night party-oriented rambunctiousness, and the customers benefit from greater taxi presence when they want to retire.  The network is striated, yet each layer finds itself interwoven with its neighbors in ways that foster the perpetual health of the region.

Similarly, these emergent interdependencies can be found on much larger scales when considering questions of urban development.  Does the 495 Beltway around the District create a boundary that demarcates a region of development in a similar way that Robert Moses separated Jones Beach from Manhattan’s rabble?  Did the disuse of the Hudson River as an trade route doom the industrial towns of northern New York state to decline?  And on even larger scales, these same connections exist: Does a corrupt government provide financial institutions less incentive to lend?

But international development wants not only to understand the ways these economies of agglomeration work, but to be able to influence them, create environments for stability and growth.  Professor Garcia’s prompt suggested that the global network might be seen from a number of different vantage points: that of states as nodes, financial institutions as nodes, and NGO’s as nodes.  Instead, I prefer to see each of these vantage points as a way of looking at one particular striation of the Global Network.  International development, unfortunately, cannot afford to look at each of these striations independently, but instead must see their interdependencies.  The existence of the District’s nightlife is dependent on a number of networks working together, creating economies of agglomeration, efficiency and maximizing the ease of growth.  Provoking growth in an impoverished community will similarly depend on the creation of efficiencies between various networks, building the connections between the nodes of each striation vertically as well as horizontally.

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May 28 2009

Nexus and Small World Theory

The “lightbulb moment,” in which one’s eyes widen, breath is drawn in, and a rude interruption of ones conversant inevitably follows, represents the act of having an “idea.”  The experience of it is a surprise, as if the idea could not have happened if it was expected.  Ideas are rarely something ordered a la carte, wholesale or for take out.  Insomuch as we have little control over ideas, it is exceptional how much ideas reflect our own experiences, learning and attitudes.  The pervasive way in which we inhabit others’ ideas, however, is even more profound.

I confess, my ideas are rarely my own.  Even those fleeting brain spasms that I might believe novel or original are inevitable outcomes from the accumulation of experience—an imposition by my parents’ values, for example, or a knee-jerk effort to fit into a social group.  To say that ideas are socially constructed is to state an obvious fact, as if the hermetically sealed brain could find the stimulation amidst its environment to make something of nothing.  Fat chance.

Recently, I watched a documentary about the Mass Games, an institutionalized instantiation of the North Korean cult of personality.  My interest in this subject was inspired by a certain close somebody, the font of many of my ideas these days.  The strong ties I have with this somebody were built through our proximity in graduate school, shared interests, network of friends, and other, less definable things.  Yet, my interest in the ghastly lives of the North Korean people is not ‘because’ of my close tie here in the District, but rather because of the many other connections beyond that person: to Asia, to cultural identity, to a particular group of people.  Lacking personal connections to the Mass Games is not an obstacle in the way of thinking about them, considering them in relation to my other, more derivative ideas of personal fulfillment, political leadership, art, and spectacle.

The degrees of separation between me and the Mass Games are many, but ideas form the bridges that bring me close to the Mass Games.  While abrupt, let me consider this in relation to international development: it was a lack of ideas that doomed the Washington Consensus to groupthink.  Their lack of ideas stemmed from their homogeneity, the lack of ideas became malignant when combined with the power to impose their values of the structures that controlled the lives of the countless millions in the developing world.  It would follow, then, that local expertise needs to infiltrate the 19th St. institutions in DC, but it also suggests that the expertise must be varied.  A Bangladeshi economist educated in the London School of Economics might not provoke the new ideas required to bridge the gaps between the traditional international development strategies and those that are game changing.  Perhaps, I submit, the local expertise needs to be a bit more conventionally local, the better to inspire more the unconventional in the minds of the insular.

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May 28 2009

Globalization and Its Discontents

Stiglitz’s criticism of the IMF seems focused on how developed nation’s values, motivations, and desired outcomes are imposed on the plights of developing countries in efforts to realize a mythical “developed” status.  He accuses the IMF being arbitrary in the way it applies its loan requirements, ignorant of the plight of the impoverished that live beyond the bounds of the region’s primate city, and worst of all, beholden to the interests of the developed world rather than acting as an advocate for the well-being of the world’s poor.  It’s a bleak look at the institutional apparatus that provides the developed world’s most salient efforts at managing a global economic environment.  He focuses his recommendations on: definition, determination and direction.

Stiglitz identifies problems at the very beginning of the development process, particularly in the way that problems are defined and modeled.  For example, he writes about how current development issues in South America were treated similarly to the development issues confronting the Soviet states following the dissolution of the USSR.  Instead, he’d prefer to see problems defined locally, according to culturally pertinent desires and local experience.  He’d also like to see more self-determination and self-direction in the way issues are resolved that would account for unpredictable regional and global issues as well as the needs of the country in question.

To me, it seems like more than an indictment of the IMF or of problems with the globe’s governing institutions, Stiglitz is criticizing the way that the developed countries project their own values and goals on the economic well-being of the developing world.  The social networks and decision making processes endemic to the governing institutions are crowded with the interests of the developed: the pharmaceuticals, the banks, the agricultural networks.  The very institutions are simply a method of conveying and imposing the values and proscriptions of the developed world into the lives of the impoverished.

Economic measurements might describe a great deal about the health of a developing country’s market, and might assist in identifying the most appropriate actions to rectify current and future problems.  Those very measurements are, however, tools used to hide the embedded values and motivations the developed world uses to justify is own philanthropy.

Questions for the future: what about the Gates Foundation, and how does their model of research and implementation differ from the IMF, World bank, or WTO’s?  Can we describe the relationships between the players that make up the 19th St.’s power base as part of and influencing a social network?  If so, can we describe the developing nations as part of and influencing a social network, or are they completely disenfranchised of agency within this current paradigm?

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