Where is the Market?

July 9, 2012

One of the books on my summer reading list here is John McMillan’s Reinventing the Bazaar: A Natural History of Markets. I’m about a third of the way through this as we finish the first phase of the Innovation Institute, Immersion. I know that we are in a developing country, but thinking about this book in conjunction with a scholar workshop we had on the innumerable hidden and financial transactions around us, it is amazing to see how the markets in the village are designed, organized, regulated, and function, both formally and informally. 

McMillan discusses markets that bring together buyers and sellers to create gain for both parties. He quotes a dictionary definition of markets as, “a meeting together of people for the purpose of trade by private purchase and sale.” There are many examples in Nyarbuye that fit this definition in the most traditional sense. Shops in our village sell salt and sugar, cell phone minutes, and tomatoes. We have a salon, a carpenter, a bicycle repair shop, and even a water delivery service. All of these are registered with the government and pay taxes, and some have a few employees. We also have many co-operatives, including a women’s handicraft group called “Rights of Women” and an agriculture group called “I’m sick of poverty.” Even health care has a market through the government’s Mutual Health Care program. A bank from the nearby town Rwamagana comes to Nyarbuye to extend loans specifically to women, and neighboring communities gather near the football field on Tuesday afternoons to exchange their goods. Financial transactions and markets are everywhere.

Perhaps more interestingly, the village also relies heavily upon the more informal trading mechanisms upon which the community is built. You can see this in the family that trades for milk while its cow is pregnant, in loans between friends to buy medicine for sick children, and in the financial roles and responsibilities divided between husbands and wives. Even in Nyarbuye, a futures markets of sorts exists, and financially astute individuals are buying sorghum and firewood to store for other seasons in which they predict higher prices will prevail. It is in this latter type of transactions that we are learning much about the fabric that actually holds this community together.

What have we learned from this new knowledge and understanding about opportunities for innovations? We scholars have been reviewing our notes from interviews and experiences during the Immersion Phase, and several major themes regarding opportunities for new or redefined markets have become obvious. These include the following:

• The need for electricity for work, studying, and the completion of daily tasks;
• The high transaction costs of getting water from Lake Muhazi, in terms of time and in the costs of illness from dirty water;
• Difficulty in saving for high fees for secondary school;
• Not just a lack of financing options but a cultural hesitation to take out loans;
• The problem of “small land,” or insufficient acreage to produce a surplus to sell at market;
• High costs of health care and distance to doctors;
• Availability and cost of agricultural inputs;
• Affordable transportation (i.e. bicycles).

What’s next? As we move into the second phase of the Innovation Institute, Inspiration, we will continue to read, observe, and learn about the myriad of diverse markets in the community. We will be forming design teams this week comprised of 1-2 scholars and 4-6 community members. These teams will them think about how to use the village’s assets to create an innovation that will improve and add value in new and creative ways. Stay tuned!