From Genocide to 3G: Innovations in Rwanda
Vrakas, John, Kennedy School Review
Standing in the heart of a village in northwestern Rwanda, a farmer named Eusebe faces a dilemma. Traders have offered him 36,000 Rwandan francs (RWF), or about US $60 per ton, for his plantains. He hesitates; the farmer knows this is a profitable price, but he has no idea if it's a good price. A few years ago, Eusebe would have been easily satisfied with an offer that provided even a modest profit. But today he is armed with a mobile phone and decides to send an SMS with the word "plantain" to a service called e-Soko. A moment later he gets an SMS showing the retail price of plantains approaching 50,000 RWF in the capital of Kigali and decides to haggle with the traders until they settle on 42,000 RWF.
The e-Soko project, launched by the Rwandan Ministry of Agriculture in early 2011, provides market price information to rural farmers and cooperatives. It was designed to serve the large swaths of farmers who previously had to sell their goods for a pittance simply because they did not know what price the market would bear. But now farmers have access to a database covering more than sixty agricultural commodities in the country's forty-one markets, all of which are accessible through SMS (Melhem 2011).
Programs like e-Soko are heralded by techno-optimists as proof that mobile technology can make major strides in uplifting the world's poor. Their confidence is bolstered by the devices' rapid spread, which itself seems like a force of nature. Mobile phone penetration in Rwanda grew from less than 1 percent in 2005 to 27 percent in 2010, with three mobile operators competing for the local market (Melhem 2011). Rwanda's rapid technology adoption, unfortunately, is an exception among developing countries. Many developing nations have struggled to scale up effective government-backed programs that tap into technology's promise. Often, these countries lack the capacity for innovation and grow programs slowly, if at all.
BARRIERS TO SCALING UP
How does Rwanda succeed in technology-based development where so many other countries have failed? Lant Pritchett, a professor at the Harvard Kennedy School, thinks that the answer might have something to do with what he calls a "capability trap" (Pritchett et al. 2012). He thinks that many developing countries get trapped in processes where they make creeping, paltry gains while failing to make real gains. Pritchett believes development efforts fall into this trap due to incentives for what economists call "isomorphic mimicry" and "premature load bearing." Put more clearly, this means they take a cookie-cutter approach to development by copying the policies, regulations, and institutional structures of economically successful countries and pasting them unaltered into countries that are unable to support them. The result is that many poor countries appear to be working toward the promise of a better future by looking more and more like prosperous Western nations, while in reality their governmental systems remain functional only on the surface. "At the current rate of progress," Pritchett said in an interview with Foreign Policy magazine, "it will take literally thousands of years for many developing countries to reach Singapore's level of capability" (Foreign Policy 2011).
This tendency of aid agencies pushing developing countries to mimic Western institutions is often referred to pejoratively as "Big Development." By contrast, Rwanda has been able to escape the institutional black hole of Big Development by searching for the most effective ways to meet the specific needs of Rwanda itself.
The nation hasn't held back when those ways diverge from the best practices of Western institutions, even when it also means diverging from their good graces. This approach to development, referred to here as "Smart Development," illustrates how countries can generate a novel solution to a specific problem through institutionalizing the practice of genuine innovation. …