Musings on market-oriented approaches to International Development
Since the mid to late 1900s, Clarks have been a popular brand of shoes in Jamaica. By no means is this brand indigenous – it originated from the United Kingdom. For Jamaicans, the durability of the shoe was a most appealing factor, in addition to the ease of keeping the (non-suede variety) clean.
6 decades later, a talented – and controversial – dancehall artist, Vybz Kartel, revived the brand, emptying stores’ stocks. The craze went international. Stores in cities with heavy Jamaican Diaspora were surprised that a crowd with more, er, “colourful” tastes eagerly sought a relatively staid brand.
In North America and Development circles, a different footwear brand has been making waves: Toms shoes. The company has an initiative whereby for every shoe a consumer buys, another pair is given to a child in need, many of whom are in the developing world. For consumers who want to be a “social” consumer, Tom’s offer a meaningful – and trendy – opportunity.
So, what’s wrong?
Some are less than pleased with the idea. While this article expands on the criticisms, I will summarize them below:
1. Donor demise: Free shoes create a donor mindset, where recipients place less value on the object and fail to develop a sense of self-sufficiency.
2. Market mayhem: distribution of free shoes disturbs the local market, possibly challenging the growth of local firms, if not causing outright failure;
3. Wasted resources: the money spent on providing these shoes should be focused on more worthier needs than footwear;
I believe that while this project is not perfect – few, if any are – it is one that should be deemed acceptable, if not outright welcomed.
It might be true that some people may place less value on items received for free. Yet, surely that is not a universal fact. One thing that we have learnt is that consumers in the developing world are more similar to consumers in the developed world than may have been initially expected.
If my friends received a free and desirable pair of shoes, most would be unlikely to place less value on them, or become less self-sufficient. Why should we expect every single recipient, or even most, in the developing world to be different? In fact, based on the work done by two leading economists, free items may be valued and used by people from poor households.
From what I have seen in parts of Africa and Asia – albeit from my very limited experience – people with truly little money hardly wear shoes. Many children walk barefoot to school. And for those who do have footwear, it is often a pair or flip flops. For these people, their shoes come from China – not the local market.
Yes, some flip-flops are made locally. Yet, outside of North America, local flip-flops/footwear is often too expensive for those with very little income. As a result, if Toms is giving away these shoes to people who really need it, I would expect that it is unlikely that the local market will be affected. From what I understand, the affected exporter, China, seems to be doing just fine.
Last, some argue that the financial resources used behind Toms program should go to more worthy initiatives. Maybe. Yet, to me, what comes to mind is the link between shoes and any health benefits.
Shoes may not be the most pressing need of low-income households. At the same time, that is not to say that shoes are not important. Neglected Tropical Diseases, such as Chagas disease, can be spread through broken skin. Chagas disease affects 12 million alone. In protecting recipients from these effects, Toms is helping people live better lives.
So like Clarks, it seems that Tom’s shoes may have a strong value proposition to consumers in the developing world. And while I would push the firm to work with firms in the local markets to create shoes, and in turn jobs, for now – whom the shoe fits, make them wear it.