I’ve been thinking a lot lately about the connection (or disconnect) between democratization strategies of the post cold war era (which made neoliberal market ideals the basis of democratization) and the exploding trend within development circles towards social entrepreneurship, microfinance and microenterprise.
On the face of it, this trend—what I call “micro-responsibility”—seems to represent the ultimate form of democracy as micro credit, micro enterprise are a means to empower formally disempowered groups, particularly women. The argument, so it goes, is that when women are empowered economically, they will also become empowered politically. And when that happens, domestic policies will begin to reflect the needs of women, centered on the family and provision of social services.
Because micro credit is usually based upon social capital for collateral, loans are dispersed to small groups and peer pressure is the mechanism for ensuring repayment. In that regard, these groups become interest groups in their own right—the interest of the group is to ensure the success of each group member’s small enterprises, which helps maintain loan repayments, which will then lead to the ability to borrow more, and so on. Each member of the group can vote on the trustworthiness of the other, so there is more incentive within the community to find ways to cooperate with each other and perhaps account for the needs of minority groups. De Tocqueville would be proud.
Sounds good, right?
But in reality, is this a burgeoning form of democracy or is this further atomization of already disenfranchised groups? Is the connection between economic empowerment and democracy a false one? Is there a missing link?
This is what I’ve observed while in places like the Dominican Republic and India, where micro-responsibility is part of the development lexicon, and it doesn’t really look like democracy in action to me: Women take out small loans for very small businesses, like the tiny corner booths everywhere in the bateys in the DR, which sell individual packets of laundry detergent or shampoo, and occasionally fruits and vegetables. They don’t really understand diversification or reinvesting their profit—or even profit margins, for that matter. But the tiny profit they do receive is enough to feed their families and perhaps to buy something like a television. This is, some would say, the empowering aspect of the endeavor, as the women beam with pride over their accomplishments.
But the situation is far more precarious than that. One woman I spoke with in the DR had been a very successful borrower, and her small booth was doing well. She went to market with all of her money to buy her product and the cash (approximately $500) was either lost or stolen—and her business was devastated. She still has to repay the loan, but has no way to do so. She is further behind than she had been four years earlier. And, in a sense, she is banished from the “interest group” of her loan community, because now they are all responsible for repaying her loan and now see her as a pariah.
Where is her empowerment? Can she appeal to a government that is now willing to pay more attention because she had taken economic responsibility for herself? Are the groups of women borrowing small loans everywhere a force to be reckoned with, or still just as marginalized, now only with slightly better outlooks?
Perhaps I am looking at this the wrong way. Perhaps the goal of helping the “Bottom Billion” is not to empower them politically but rather to rectify some of the evils inherent in the massive gap between the top and bottom of the pyramid. After all, what possible interest could it serve the top to have a bottom billion now capable of acting politically, of making international and national demands that would have to be met? Perhaps better to encourage the bottom billion to believe that the incremental improvements in their lives—a better crop through better irrigation, more time to work in the home because water is pumped just outside, a loan of $200 to set up a sewing business—is indeed the path to a better future.
On the other hand, who is to say that the bottom billion even has an interest in the type of power structures that were never created for them in the first place? And if this is so, perhaps it is that level of “micro-responsibility” that relieves them of the burden of caring about those alien structures at all. Who cares if the government in some far off city is working on your behalf when you know that there are other structures—local, community oriented structures—that will serve you better? Why care about your own government when there are other institutions (foreign institutions, even) that seem to provide a more immediate solution to your problems?