As many Savings Group implementers move steadily towards fee-for-service models of group replication, in which trainers train because they are paid to train, I propose that we should take a deep breath and think this through. Here’s why… 

Lewis Hyde, in a short article called The Gift Must Always Move, and in his more celebrated book, The Gift, describes the difference between a Gift Economy and a Market Economy.

Here’s the Wikipedia description of a Gift Economy: 

…a gift economy (or gift culture) is a society where valuable goods and services are regularly given without any explicit agreement for immediate or future rewards (i.e. no formal quid pro quo exists). Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community. The organization of a gift economy stands in contrast to a barter economy or a market economy. Informal custom governs exchanges, rather than an explicit exchange of goods or services for money or some other commodity.

Lewis Hyde expounds on this:

The opposite of “Indian giver” would be something like “white man keeper”… Whatever we have been given is supposed to be given away not kept. Or, if it is kept, something of similar value should move in its stead… The gift may be given back to its original donor, but this is not essential… The only essential is this: the gift must always move.

I have been startled in the past at the surprise of some Western donors that volunteers will work without pay to spread the savings group concept. Why are they surprised? It is likely that these same people serve willingly in multiple volunteer roles, on the PTA, the Scouts, their kids’ soccer teams, bridal showers, community and church associations, political parties, and so on. But our norms have now moved towards the market economy. Our children spend thousands of hours watching advertising, and we define our success as a nation in terms of our monetized “national product”. Economists rule the world.

But economists don’t rule all the corners of the world and there are still many places where the market economy has not replaced the gift economy. The Linux computer operating system, millions of line of code freely donated by software writers around the world, continues to be used on millions of devices despite the attacks of Microsoft and other representatives of Big Software. The Burning Man festival gets bigger every year, bringing together tens of thousands of people to create an alternative society where commerce is forbidden and “gifting” is the norm. Wikipedia, in fact, the volunteer-user-driven reference library, has become by far the most used reference source. MIT, Berkeley, and other top universities are putting their courses on line, as a gift to the world.

Gift societies are not done with. They are under attack, but still healthy.

Back to Lewis Hyde, again as cited (for free!) in Wikipedia:

Hyde argues that when a primarily gift-based economy is turned into a commodity-based economy, “the social fabric of the group is invariably destroyed.” Much as there are prohibitions against turning gifts into capital, there are prohibitions against treating gift exchange as barter.

To keep a gift, and not give another in return, is reprehensible. Hyde says, “In folk tales, the person who tries to hold onto a gift usually dies.”

I remember talking with my friend and colleague Fouad Abdelmoumni when we were working together at Al Amana in Morocco. One of our staff was amazed at our willingness to share our procedures manual with other MFIs. Fouad replied, “Oui, mais USAID came and gave us money and technology, and enabled us to get started. How can we then turn around and say, ‘This is ours – you can’t have it!’” Fouad hadn’t read Hyde, but he knew intuitively that it was inappropriate to be given something for free, and then turn it into a possession.

This is why I am so skeptical of the assumption that fee-for-service is a good fit for savings groups. We have been given a technology, most of which was developed by villagers in various countries. Do we really want to turn that into a commodity, to be sold by CBTs and PSPs? Now, I know – for some readers, the answer is a considered Yes. Commodities DO move around the world effectively and efficiently, driven by market forces. Why not let market forces push out savings group technology? Well, big question. If moving goods and services is the only metric we care about, then I have nothing to say.

But before you plunge ahead into fee-for-service, read Lewis Hyde. Think about your own volunteer work. How confident are you that using market principles to spread a popular form of financial intermediation is an unqualified good thing?

The reader is invited to consider this post in conjunction with earlier posts I have written here and here. And also hereand here. 

 

 

Reader Comments (5)

As usual Paul, erudite and persuasive, but not backed up by the limited data we have at our disposal. Where one-country, same INGO comparisons are available, the SAVIX shows that fee-for-service village agents tend to create groups that save more, in which more money circulates as loans and in which returns are higher - significantly so. They seem to out-perform volunteer VAs by large margins on these metrics and, what is of even greater interest, in many (not all) cases fee-for-service VAs out-perform paid staff. And why should this be a surprise? Isn't it likely that if you are charging your neighbours for a service you are likely to feel an even greater accountability for giving good-quality service?

Wed, February 22, 2012 | Hugh Allen

Hi Hugh,

I trust we'd all agree that more data is needed, especially concerning the extent to which an early emphasis on FFS might dampen spontaneous group formation. I think this will be coming out of Kenya maybe within a year.

I have even less data on the comparative quality of the work people do for money, and the work people do because they want the work to be done. It isn't obvious to me that working for money generally produces better quality work than working for the work itself.

In fact, as you know, volunteers who form groups often get a little tea money as thanks, so there's not a clear line between these categories.

I actually have deep sympathy with marxism - there, I said it, and now I'll never get elected to national office in the US! So, it's not surprising that I argue the way I do. But I also admire capitalism when its excesses are kept in check, and I love creating jobs at the village level. So, for me, I keep coming back to saying, it's an open question, there is more data coming, and probably quite a bit available now that could be interpreted in such a way as to support either FFS or vol approaches.

I rest my case, which is simply that it is way too early to rest ones case.

Paul

Sun, February 26, 2012 | Paul Rippey

I'm actually pretty satisfied with the data, although I'd like to run it across more countries than at present (we are only able to compare about 10,000 or so groups), but the call for more data is endless and the end results tend to lead to the call for more data. I'd rather that programmes did serious research by having half of their VAs work on a fee for service basis and half on a voluntary basis.

On a largely ideological level I'd like to know how many of those who promote SGs through NGOs do so for the feel-good reward and how many insist on cash. Yourself excepted, we aren't being inindated by serious professionals doing this for nothing and I'd rather avoid suggesting that very poor people should live by a utopian socialist imperative, while I drive off in my Land Crusier. Especially when they need to pay school fees and buy fertiliser.

So, for me, the default setting is to propose fee-for-service and to see how it actually works out in terms of whether or not a Village Agent takes the money or feels obligated to do it voluntarily - but also how the groups turn out. On the basis of the latter criterion, groups that are paying for service tend to better than those that do not.

Mon, March 5, 2012 | Hugh Allen

Hi Hugh and Paul,

Let me jump in to this discusion and propose that we also consider the following

In response to Pauls sentiments ' ...that volunteers will work without pay to spread the savings group concep.. t' since they are in many other volunteer roles- why do we want to push them to do it voluntarily and not leave their society relationships cut it out?

Given the opportubity cost for the trainers and the needs they have to meet - do we think they can live on the the tea monies they receive?

I will look for the read but i tend to disagree that the implicationon that this would destroy the social fabric as there are many other social forums in the areas we work in and they are not purely gift economies.

Mon, March 5, 2012 | undignified

In response to 'undignified' re the statement

"Given the opportubity cost for the trainers and the needs they have to meet - do we think they can live on the the tea monies they receive?"

First off, most people have multiple sources of income and undoubtedly would not rely only on tea monies to survive, or only on any one source of income for that matter. Second, the nature of volunteering is that one does it freely....so if someone is motivated by the financial aspect of an activity, they will make their decision accordingly. By the same token, those that are motivated by non-financial reasons will also make the decision for themselves as to whether the activity is fulfilling enough for them.

Hence I feel people can make the decision for themselves as to whether tea monies is 'enough' for them. We don't need to make the decision for them.

Thu, March 15, 2012 | Jill Thompson