Mobile Money, Network Power & Development as Freedom

The International Journal of Communication recently published an article I wrote on the implications of Kenya’s popular mobile money service, M-PESA, for Sen’s theory of development as freedom.

Mobile Money, More Freedom? The Impact of M-PESA’s Network Power on Development as Freedom

The role of ICTs in development is contested between those who believe they will facilitate human development and those who believe they are, at most, impotent, and at worst, counterproductive. This article uses an examination of M-PESA, a large-scale mobile financial service in Kenya, to argue that the impact of ICTs on development as freedom differs with both the specific conceptualization of freedom used, and the institutional arrangement of the technology in question. The article’s novel conceptual model links the adoption of mobile money to its impact, suggesting that the dominant individualistic and instrumental approaches to ICT4D overlook the ways in which power and domination function alongside freedom when these factors are considered relationally and substantively. I demonstrate that the internal plurality of the concept of freedom leads to both new forms of empowerment, but also to limitations on choice and new forms of dominance. In closing, I suggest institutional and technological arrangements that are most likely to maximize the development potential of mobile money.

The full version is available here.

Update: Thanks to Bill Maurer of IMTFI, this paper was featured in a Bloomberg BusinessWeek article entitled “Monopoly Power in Mobile Money.”



2 Responses to “Mobile Money, Network Power & Development as Freedom”

  1. Gravatar of Alex Free Alex Free
    10. November 2012 at 17:26

    Hi Kevin, 

    Thank you for your article. I really enjoyed reading it and reflecting on how we might conceptualise the progressive yet at the same time ambivalent developmental implications of mobile money and M-PESA.

    I had a couple of questions in response if you can spare the time to respond. They are not intended to be critical or flippant; I’m simply trying to get my head around areas of literature that I am largely unfamiliar with.  

    On page 2660, you discuss maximizing the developmental potential of mobile money and draw on a quote from Grewal, which I didn’t quite get. In what situation would opening up access to one network (i.e., a predominant one like Safaricom’s M-PESA) run the risk of other users (‘outsiders’) needing to ‘abandon their standards’? Presumably here we are talking about access from the perspective of other developers outside of Safaricom (other services or companies, aspiring to leverage their own ‘networks’)? Because on questions of access for the end-user, surely M-PESA must be seen very positively (a user only requires a basic phone, it is easy to register…)?

    You then mention the ‘differing properties that determine the extent to which they [network standards] exhibit network power’. This led me to question whether I had understood the concept of ‘network power’. I had taken it to be power of a network (e.g., for us, M-PESA) to stimulate its own diffusion (to be used around the country, by many), that is, to expand spatially, while at the same time protecting itself from being displaced by another network (insulation from competing networks’ power). If we are thinking about ‘maximizing benefits’, does the challenge become the need to reassure those at the helm of a predominant network of the benefits of opening the network (i.e., for interoperability or experimention, as you mention) to expand? Is the point to see network power as a productive force in the ideal, provided that we can establish how best to encourage cooperation and safeguard investment in innovation?

    Incidentally, in response to something ‘instrumental’ you mention in passing, I have been amazed at the high charges levied on sending small transfers in Kenya: I think a KSh50 attracts a fee of KSh3 (6 per cent), for example. While M-PESA can be lauded for its ability to enable users to send money securely and speedily, it’s not clear to me why Safaricom would penalise users sending small amounts – who are likely to be those of least economic means. 

    Anyway, thanks again for such an interesting article :) It’s fantastic to see constructive reflections and suggested conceptual approaches to evaluating ICT4D.


  2. Gravatar of Kevin D Kevin D
    10. January 2013 at 22:24

    Hi Alex,

    Thanks for the comment and apologies for the delay. 
    Two quick replies:
    – On the first issue: it is possible to have a standard that is open to adoption but still requires adopters to abandon their prior standard. This would be the case with, say, a phone user on CDMA adopting a GSM network. It’s an issue of interoperability. By contrast, TCP/IP was designed to allow adopters to not abandon their standard (thus, a ‘network of networks’). Because Safaricom doesn’t work with, say, Airtel, it requires adopters to abandon their existing standard. 

    – On the second issue, it may not always be in the interest of those ‘at the helm’ of the dominant standard to open it up. I’m not opposed to considerations of more mandatory ways to open up – there are obviously costs and benefits that should be weighed, but I don’t think the only way is to convince network operators through some appeal to enlightened self-interest.


Leave a Reply